United Airlines borrows $2 billion as coronavirus hits industry

FILE PHOTO: A United Airlines passenger plane is taxied at Newark Liberty International Airport, New Jersey, U.S., December 6, 2019. REUTERS/Chris Helgren/File Photo

(Reuters) – United Airlines UAL.O said on Thursday that it had borrowed $2 billion to deal with an unprecedented disruption to the travel industry as the coronavirus pandemic leads to large-scale flight cancellations and global travel bans.

US President Donald Trump on Wednesday night surprised an already battered airline sector with a 30-day ban on flights from continental Europe, deepening the sector’s misery and mounting pressure on governments to that offer emergency support.

A number of US and European companies have been scrambling in recent days to withdraw funds from existing credit lines and, in some cases, obtain new loans as the impact of the outbreak on growth unfolds.

boeing PROHIBITION he also said Wednesday that he planned to draw down the remainder of a $13.8 billion loan he agreed to last month.

United Airlines said it had borrowed the full amount of the term line of credit on March 9, with the funds used to pay fees and transaction charges and for other capital needs.

The principal amount of the loan must be paid in a single installment before March 8, 2021.

The World Health Organization on Wednesday described the new coronavirus as a pandemic.

Reporting from Rachit Vats and Noor Zainab Hussain in Bangalore; Edited by Maju Samuel and Saumyadeb Chakrabarty

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