American Airlines Group Inc. is in talks to raise new financing to help it weather the collapse in travel demand during the pandemic, according to people with knowledge of the matter.

The company is working with Citigroup Inc. on a potential junk bond offering that may be secured by collateral including airport slots and gates, said the people, who asked not to be identified because the talks are private.

Representatives for American and Citi declined to comment.

Several air carriers including Delta Air Lines Inc., Southwest Airlines Co. and JetBlue Airways Corp. have tapped debt investors to boost liquidity as the coronavirus nearly wiped out travel demand. American Airlines has yet to do so, but it has received US$5.8 billion in federal payroll support as well as a US$1 billion 364-day term loan from banks, according to a regulatory filing on Friday.

Delta returned to the bond market earlier this month, raising US$1.25 billion from five-year unsecured bonds with no collateral protection for investors. It borrowed US$3.5 billion in April through a sale of five-year secured bonds that pledged domestic slots at New York airports and those at Heathrow in London. Southwest has tapped the bond market three times this year, while JetBlue raised US$750 million from a leveraged loan sale.

Some investors have been choosy about collateral. United Airlines Holdings Inc. abandoned an effort to sell US$2.25 billion of junk bonds last month because it wasn’t satisfied with the terms. Some investors balked at the aging fleet of jetliners pledged as collateral. It’s now planning to raise US$5 billion by borrowing against its frequent-flyer program, stepping up efforts to boost liquidity amid the COVID-19 pandemic.

Read more: When United pawned old jets, bond traders sent a stark warning

Fort Worth, Texas-based American has US$11.3 billion in unencumbered assets, according to the filing. Of that, US$7.45 billion is estimated to be composed of slots, gates and routes. American’s existing term loans are trading between 71 cents and 81 cents on the dollar, according to loan sources.