United Airlines announced Monday that it anticipates having a total liquidity of approximately $17 billion by the end of the third quarter this year.
The dollar amount includes financing secured through the company’s loyalty program, as well as $4.5 billion the company received through the Coronavirus Aid, Relief and Economic Security (CARES) Act loan program passed by Congress in March.
The company said it has also worked to cut costs to navigate the unexpected impact COVID-19 has had on the airline.
“Given the impact COVID-19 has had on travel demand, United has spent the past several months aggressively and proactively cutting costs. The airline has already reduced planned capital expenditures and operating and vendor expenditures, suspended raises and implemented an unpaid time off program for management and administrative employees, put a freeze on hiring, introduced voluntary leave and separation programs, reduced pay for all executives and cut its CEO and President’s base salaries by 100%, among other cost-saving measures,” the company said. “United expects an average cash burn of approximately $40 million per day in the second quarter of 2020 and to reduce its average cash burn to approximately $30 million per day in the third quarter of 2020.”
Goldman Sachs Lending Partners LLC will act as a structuring agent to provide financing through United’s MileagePlus program. MileagePlus has more than 100 million members and over 100 program partners. According to United, the program has historically generated stable revenues and free cash flows for the company, while increasing customer retention. In 2019, the company announced that MileagePlus member miles would never expire.