June 22 (UPI) -- American Airlines announced Sunday it intends to secure $3.5 billion in new financing to help get through continued coronavirus-induced travel restrictions as the airline industry continues to suffer from transportation bans.
The $3.5 billion will help improve America's liquidity. The airline said it would offer $750 million worth of shares to the public and $2.75 billion in private debt. It said part of the money will be used to renegotiate a $1 billion loan it took out in March at the start of the COVID-19 pandemic.
"The outbreak and global spread of COVID-19 has resulted in a severe decline in demand for air travel, which has adversely impacted our business, operating results, financial condition and liquidity," American said in a filing with the Securities and Exchange Commission Monday.
"The duration and severity of the COVID-19 pandemic remain uncertain, and there can be no assurance that these actions will suffice to sustain our business and operations through this pandemic," the statement said.
American said the restrictions have continued during the periods of "high volatility" in fuel costs and disruption in supply while managing its ongoing financial obligations and its inability to obtain additional financing because of the adverse economic conditions.
United Airlines last week said it expects to have nearly $20 billion in liquidity by the end of the third quarter. The airline said it plans to use its frequent flyer MileagePlus program to secure a $5 billion loan. United also expects to borrow $4.5 billion from the Coronavirus Aid, Relief, and Economic Security Act loan program.