Alaska Airlines has just taken a $1.5 billion loan to help cover its costs in acquiring Hawaiian Airlines, using its loyalty program, Mileage Plan, as collateral for the deal.
A company press statement says “Alaska intends to use the proceeds from the Intercompany Loan (i) to redeem certain outstanding debt acquired or assumed in the merger of the Company with Hawaiian Airlines pursuant to an Agreement and Plan of Merger dated as of December 2, 2023 and (ii) for general corporate purposes and to support its liquidity position.”
It’s just a reminder of how valuable an asset these airline loyalty programs are; the airlines make big bucks selling points in bulk to credit card issuers and other merchants, who use them to attract customers to their products.
It’s not the first time loyalty programs have been used this way. Most recently, during the pandemic, American, Delta and United all took that path, and JetBlue has recently been under pressure to do so as well.
