Jim Cramer: Delta Still Needs Customers

Katherine Ross

Delta announced on Monday it was looking to raise $6.5 billion through new bonds and loans backed by its SkyMiles loyalty program as the air carrier struggles to survive the economic shutdown brought on by the coronavirus pandemic.

SkyMiles IP Ltd. intends to lend the net proceeds from the offering of the notes and the new credit facility to Delta, after depositing a portion in a reserve account.

Delta expects to use the proceeds for general corporate purposes and to bolster its liquidity.

The airline and SkyMiles IP Ltd., a newly created subsidiary named for the loyalty plan, will be co-issuers of the senior secured notes and co-borrowers under the credit facility,

While Delta has said it could furlough nearly 2,000 pilots in October without more federal aid, the air carrier believes it can avoid any flight attendant furloughs through the winter due to strong demand for voluntary departures or leaves.

While Delta has raised $16.5 billion since the start of the pandemic, the carrier is still bleeding about $27 million in cash a day,

Last week, Delta's Chief Financial Officer Paul Jacobson said that while the airline raised $16.5 billion since the start of the pandemic it is still burning through about $27 million in cash a day,

This all comes as U.S. airlines have been devastated by the coronavirus outbreak, which has severely curtailed travel and sparked layoffs.

You can follow Jim Cramer and Katherine Ross on Twitter at @JimCramer and @byKatherineRoss. Read more from Katherine Ross here.

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