American Airlines Group Inc. is seeking to raise about US$1.5 billion by selling shares and convertible notes, according to people with knowledge of the matter, as it shores up liquidity after months of travel disruption from the coronavirus pandemic.
The carrier, which has been gauging demand from potential investors over the weekend, could announce the offering as early as Sunday, the people said, asking not to be identified because the information is private. Deliberations are ongoing, and the timing and details of any deal could change, they said.
A representative for American declined to comment.
Fort Worth, Texas-based American is also planning a junk bond offering to raise about US$2 billion at a yield of 11 per cent, Bloomberg News reported Friday. The company is working with Citigroup Inc. on the debt offering, which could be launched as soon as this coming week.
Delta Air Lines Inc., Southwest Airlines Co. and JetBlue Airways Corp. have tapped debt investors in recent weeks to boost liquidity.
Airline passenger numbers in the U.S. fell 81 per cent year-over-year as of June 16, according to the Transportation Security Administration. American this week removed a passenger who refused to wear a face covering and banned him from taking flights in the future.
American shares have tumbled 44 per cent this year through June 19, the second-best performer in a Standard & Poor’s index of the five largest U.S. carriers, behind only Southwest. The gauge has fallen 47 per cent this year.
American to date has depended largely on US$5.8 billion in employee payroll support from the U.S., and is in talks to close a separate US$4.75 billion federal loan the carrier has said should be finalized this month.
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