Jim Cramer: American Airlines Depends on the Future of the Corporate Traveler

Katherine Ross

American Airlines plans to raise $3 billion by selling shares and convertible senior notes, half of those due in 2025 and the other half later than that, according to a statement. It also intends to enter into a new $500 million term loan facility due in 2024.

The stock and convertible notes offerings include a 30-day option for the underwriters to purchase up to $112.5 million of additional common shares and up to $112.5 million of additional convertible notes respectively, according to the company.

Shares of American, in particular, have been gaining altitude following the carriers' announcement that it will boost its July flight schedule as travel restrictions imposed by the coronavirus pandemic begin to ease.

Airline passenger numbers in the U.S. fell 81% year over year as of June 16, according to the Transportation Security Administration. American removed a passenger who refused to wear a face covering and banned him from taking flights in the future this week.

Jim Cramer said, "It's a bet on a comeback of travel. Is corporate America flying again, or has corporate America said, 'You know what, it's a big expense, just use Zoom, just use Webex.'"

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