Alaska Air Group announces proposed Mileage Plan financing
Alaska Air Group (NYSE: ALK) has announced a proposed Mileage Plan Financing with an expected aggregate principal amount of $1.5 billion. The financing will be secured by collateral associated with Alaska's customer loyalty program, Alaska Airlines Mileage Plan™. The borrower, AS Mileage Plan IP , is an indirect, wholly owned subsidiary of Alaska Air Group.
The proceeds will be used to fund a reserve account, make an intercompany loan to Alaska Airlines, redeem outstanding debt from the merger with Hawaiian Airlines, and for general corporate purposes. This move comes after Alaska Air Group's recent acquisition of Hawaiian Airlines, expanding their service to over 140 destinations across North America, Central America, Asia, and the Pacific.
Alaska Air Group (NYSE: ALK) ha annunciato una proposta di Finanziamento del Piano Miglia con un importo principale aggregato previsto di 1,5 miliardi di dollari. Il finanziamento sarà garantito da garanzie associate al programma di fidelizzazione clienti di Alaska, Alaska Airlines Mileage Plan™. Il prestatore, AS Mileage Plan IP, è una controllata indiretta interamente posseduta da Alaska Air Group.
I proventi saranno utilizzati per finanziare un conto di riserva, effettuare un prestito interaziendale ad Alaska Airlines, riscattare il debito in essere derivante dalla fusione con Hawaiian Airlines e per scopi aziendali generali. Questa mossa arriva dopo l'acquisizione recente di Hawaiian Airlines da parte di Alaska Air Group, ampliando il loro servizio a oltre 140 destinazioni in Nord America, Centro America, Asia e Pacifico.
Alaska Air Group (NYSE: ALK) ha anunciado una propuesta de Financiación del Plan de Millas con un monto principal agregado esperado de $1.5 mil millones. La financiación se garantizará con colaterales asociados al programa de lealtad de clientes de Alaska, Alaska Airlines Mileage Plan™. El prestatario, AS Mileage Plan IP, es una subsidiaria indirecta completamente propiedad de Alaska Air Group.
Los ingresos se utilizarán para financiar una cuenta de reserva, otorgar un préstamo interempresa a Alaska Airlines, redimir la deuda pendiente de la fusión con Hawaiian Airlines y para fines corporativos generales. Este movimiento llega después de la reciente adquisición de Hawaiian Airlines por parte de Alaska Air Group, ampliando su servicio a más de 140 destinos en América del Norte, América Central, Asia y el Pacífico.
알래스카 항공 그룹(뉴욕증권거래소: ALK)은 예상 총액 15억 달러 규모의 마일리지 플랜 자금 조달을 제안했다고 발표했습니다. 이 자금 조달은 알래스카의 고객 충성도 프로그램인 알래스카 항공사 마일리지 플랜™과 관련된 담보로 보장됩니다. 차입자 AS 마일리지 플랜 IP는 알래스카 항공 그룹의 완전한 자회사입니다.
수익금은 준비금 계좌에 자금을 지원하고, 알래스카 항공사에 내부 대출을 하고, 하와이안 항공과의 합병으로 발생한 부채를 상환하며, 일반 기업 자금으로 사용됩니다. 이 조치는 알래스카 항공 그룹이 하와이안 항공을 최근 인수한 후에 이루어졌으며, 북미, 중앙 아메리카, 아시아 및 태평양에 걸쳐 140개 이상의 목적지로 서비스를 확장했습니다.
Alaska Air Group (NYSE: ALK) a annoncé une proposition de Financement du Plan de Milles avec un montant principal agrégé prévu de 1,5 milliard de dollars. Le financement sera garanti par des actifs liés au programme de fidélisation des clients d'Alaska, le Alaska Airlines Mileage Plan™. L'emprunteur, AS Mileage Plan IP, est une filiale indirecte entièrement détenue par Alaska Air Group.
Les fonds seront utilisés pour financer un compte de réserve, faire un prêt interentreprises à Alaska Airlines, racheter la dette en cours résultant de la fusion avec Hawaiian Airlines et pour des fins générales d'entreprise. Ce mouvement fait suite à l'acquisition récente d'Hawaiian Airlines par Alaska Air Group, élargissant son service à plus de 140 destinations à travers l'Amérique du Nord, l'Amérique centrale, l'Asie et le Pacifique.
Die Alaska Air Group (NYSE: ALK) hat eine vorgeschlagene Mileage Plan Finanzierung mit einem voraussichtlichen Gesamtbetrag von 1,5 Milliarden Dollar angekündigt. Die Finanzierung wird durch Sicherheiten gesichert, die mit dem Kundenbindungsprogramm von Alaska, dem Alaska Airlines Mileage Plan™, verbunden sind. Der Kreditnehmer, AS Mileage Plan IP, ist eine indirekte, vollständig im Besitz der Alaska Air Group befindliche Tochtergesellschaft.
Die Einnahmen werden verwendet, um ein Rücklagenkonto zu finanzieren, ein Intercompany-Darlehen an Alaska Airlines zu gewähren, ausstehende Schulden aus der Fusion mit Hawaiian Airlines einzulösen und für allgemeine Unternehmenszwecke. Dieser Schritt erfolgt nach der jüngsten Übernahme von Hawaiian Airlines durch die Alaska Air Group, die ihren Service auf über 140 Ziele in Nordamerika, Mittelamerika, Asien und dem Pazifik ausweitet.
- Proposed $1.5 billion Mileage Plan Financing to strengthen liquidity
- Expansion to over 140 destinations following Hawaiian Airlines acquisition
- Membership in oneworld Alliance, offering increased global travel options
- Increased debt load with the new $1.5 billion financing
- Potential risks associated with using loyalty program as collateral
Insights
This proposed
Key points:
- The structure, using a Cayman Islands subsidiary, suggests tax optimization
- Securitizing the loyalty program could unlock value, as these programs are often undervalued within airline stocks
- Redeeming outstanding debt from the Hawaiian merger may improve the company's debt profile
- Enhanced liquidity provides a buffer against industry volatility
While this move strengthens ALK's financial position, investors should monitor how effectively the company deploys this capital and manages its expanded operations post-merger.
Alaska Air Group's financing move reflects broader industry trends and competitive dynamics:
- Loyalty programs have become important assets for airlines, often valued higher than airline operations themselves
- This financing could help ALK compete more effectively against larger carriers, especially in the lucrative Pacific routes
- The merger with Hawaiian Airlines significantly expands ALK's market presence, potentially leading to revenue synergies
- Membership in the oneworld Alliance, combined with Hawaiian's network, enhances ALK's global reach and competitiveness
Investors should consider how this financing and the Hawaiian merger position ALK in the post-pandemic travel recovery, particularly in trans-Pacific and leisure markets. The company's ability to integrate Hawaiian efficiently and leverage its expanded network will be critical success factors to watch.
The borrower under the Mileage Plan Financing is AS Mileage Plan IP Ltd. ("Borrower"), an exempted company incorporated with limited liability under the laws of the
The Mileage Plan Financing will be (i) fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by Alaska Airlines, Inc. ("
Borrower intends to use the borrowings under the Mileage Plan Financing, after deducting fees and expenses payable by the Company, (i) to fund, in part, the reserve account for the Mileage Plan Financing and (ii) to fund, in part, a collection account, and the proceeds deposited into the collection account will be used to make an intercompany loan to
About Alaska Air Group
Alaska Air Group, Inc. is based in
Forward-Looking Statements
Forward-Looking Statements in this press release and certain oral statements made from time to time by representatives of the Company contain various forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") which are subject to the "safe harbor" created by those sections. Forward-looking statements are based on our management's beliefs and assumptions and on information currently available to our management. All statements other than statements of historical facts are "forward-looking statements" for purposes of these provisions. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "project," "predict," "potential," and similar expressions intended to identify forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company's intentions and expectations regarding revenues as well as statements regarding the Loyalty Term Loan Facility described in this press release. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements.
Factors include, among others, risks include competition, labor costs, relations and availability, general economic conditions including those associated with pandemic recovery, increases in operating costs including fuel, inability to meet cost reduction, ESG and other strategic goals, seasonal fluctuations in demand and financial results, supply chain risks, events that negatively impact aviation safety and security, and changes in laws and regulations that impact our business and other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and the Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2024 and June 30, 2024.
All forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of the Loyalty Term Loan Facility. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Risks or uncertainties (i) that are not currently known to us, (ii) that we currently deem to be immaterial, or (iii) that could apply to any company, could also materially adversely affect our business, financial condition, or future results. Additional information concerning certain factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
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SOURCE Alaska Air Group, Inc.
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