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Tuesday, July 22, 2008
United Airlines to Increase Cash Position by $1.2B
FOXBusiness
UAL Corporation, the holding company which operates United Airlines, will increase its cash position by $1.2 billion.
The airline plans to raise $1 billion in the short term, and an additional $200 million over the next two years. United (UAL) will receive a $600 million payment from Chase Bank U.S.A. (JPM) for the extension of its credit card partnership, which allows for the advance purchase of frequent flyer miles. The airline expects the deal to generate another $200 million over the next two years.
The level of reserve capital Chase had previously required the airline to maintain was also reduced to $25 million under the new agreement, freeing up an additional $350 million for use.
Shares of United were trading nearly 50% higher on Tuesday afternoon.
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