Delta Uses SkyMiles to Borrow $6.5 Billion
1 In an effort to grab $6.5 billion of cold, hard cash, Delta Air Lines has spun its SkyMiles program into a new, wholly-owned subsidiary — SkyMiles IP Ltd. — and will use so-called SMIP as collateral for the loan.
Delta and SMIP will be co-issuers of the notes and co-borrowers under the new credit facility. SMIP will then send the proceeds from the offering of the notes and the new credit facility to Delta.
The SEC filing on the new company revealed fun facts about Delta’s SkyMiles programs and its members. Some of the highlights include:
- Over 75% of SkyMiles cash flow comes from partners, with American Express leading the way.
- American Express contributed more than $4 billion to the SkyMiles program in 2019.
- Medallion members have been members of the program for an average of 16 years.
- 97% of SkyMiles redemptions are on for flights on Delta.
- Less than a third of Delta’s SkyMiles members live in a Delta hub city.
- The airline allegedly served 2.1 billion Biscoff cookies to SkyMiles members in 2019, up 7% from 2018.
- SkyMiles have not hit rock bottom with regards to value — in fact, Delta believes the program can be
devaluedenhanced much further.
Hurricane Sally Travel Waivers
2 With Hurricane Sally bearing down on the Gulf Coast, airlines have begun to issue travel waivers for travelers headed to the affected areas.
American has issued a waiver for nine cities for travel through Wednesday: Baton Rouge, Destin/Fort Walton Beach, Gulfport/Biloxi, Jackson, Lafayette, Mobile, New Orleans, Panama City, and Pensacola.
Delta has issued a waiver for eight cities, also through Wednesday: Baton Rouge, Destin/Fort Walton Beach, Gulfport/Biloxi, Lafayette, Mobile, New Orleans, Panama City, and Pensacola. It apparently thinks the people of Jackson can fend for themselves.
United is the winner, issuing a waiver for 15 cities, through Wednesday as well: Alexandria, Baton Rouge, Destin/Fort Walton Beach, Gulfport/Biloxi, Hattiesburg, Jackson, Lafayette, Lake Charles, Meridian, Mobile, Monroe, New Orleans, Panama City, Pensacola, and Shreveport. (Yes, United actually flies to all these places.)
Southwest issued an alert for three cities: New Orleans, Panama City, and Pensacola. Lastly, both JetBlue and Spirit offered waivers for just New Orleans.
As always, these situations are fluid as the track of the storm and the forecast changes.
Salt Lake City’s New Terminal Ready for the World
3 After a relatively short six years of construction, the brand-new Salt Lake City Concourse A is ready for action, opening tomorrow, September 15. Assuming all goes as planned, Delta Flight 3540 from Idaho Falls will be the first to land at the new terminal, arriving at 7:20am.
The new terminal – being constructed on the grounds of the current airport — will include two concourses. Concourse A is opening tomorrow with 25 gates for Delta. By the end 2020, Concourse B will open, and the old terminal will be razed to make way for the east side of Concourse A to be built right over the top. The second concourse will house Aeromexico, Alaska, American, Frontier, JetBlue, KLM, Southwest, United as well as additional gates for Delta.
The new terminal will be designed to handle up to 32 million passengers a year, way up from the current 10 million — and especially optimistic, as it’s being opened during the greatest downturn in travel demand ever. The cost for the airport is coming in at around $4.1 billion, but that’s only because they built the entire thing out of salt dredged out of the lake and dragged to the airport by the airport’s Executive Director himself. Otherwise it would have been much more.
When completed, the airport will consist of 70 gates, 65 elevators, 32 moving walkways, 31 escalators, and a killer view of the Wasatch Range for the entire 45 minutes you’ll be in line waiting for Starbucks.
Colombian Court Stops Government Loan to Avianca
4 A three-judge panel in Colombia blocked the government’s $370 million loan to Avianca as the airline goes through U.S. bankruptcy proceedings.
The injunction was in response to a lawsuit, stating that the loan was a threat to public resources and that the Colombian government’s actions do not guarantee a return on the investment with the airline going through bankruptcy in the United States. The suit also alleges a conflict of interest due to the fact the loan was approved by Colombian President Ivan Duque, whose sister, Maria Paula Duque is Avianca’s Senior Vice President of Strategic Relations and Customer Experience.
Both Avianca and the government plan to appeal the injunction, but in the meantime, its U.S. bankruptcy proceeding will continue. Avianca, the second-oldest continually operating airline in the world currently has instructed staff to do a deep clean of its old planes from early in the 20th century that are no longer in service to see if there might be any loose change in-between the seats.
Air Malta is Looking for a New CEO
5 Air Malta is on the hunt for a new CEO to run the company. The posted job description is looking for someone who will “manage the growth and performance of Air Malta, developing and implementing a global strategy, and assuming the responsibility for all strategic and commercial aspects of the company.”
A lot of people may want to move to the island nation in southern Europe to lead the flag carrier of Malta. Prior to applying, it’ll be important to answer a few secondary screening questions to make sure you are fit for the role:
- Have you ever hired a fake pilot or flown a commercial air jet without a pilots license?
- Have you ever sent a plane back to the gate while taxiing due to a nut dispute?
- Have you ever directed your airline to operate a money-losing nonsense flight on a 2x-weekly basis in order to bribe a politician?
- Has your airline ever forcibly dragged an M.D. off one of your flights against his will on cell phone video for the world to see?
If you were able to answer “no” to at least one of these questions, then your application, including a cover letter, should be sent by email to ceovacancy@airmalta.com. (Seriously, this email address is real.) The deadline to apply is October 2.
Airline Potpourri
- Aeromexico operated a cargo flights to Hong Kong last week – the airline’s first flight to Hong Kong and the longest flight in Mexican aviation history.
- American is reopening seven Admirals Clubs, and more importantly in the true big news of the day, it’s bringing back avocado toast.
- Avianca plans to resume flights from its San Salvador hub (SAL) on September 19.
- Delta plans to launch daily service from New York/JFK to San Salvador (SAL) on December 19.
- Emirates will return to Casablanca with 3x-weekly service resuming on Friday.
- Gulf Air is resuming service from Bahrain to India beginning today, September 14.
- Jetstar will resume domestic operations in New Zealand on Thursday.
- Ryanair now plans to cut up to 172 jobs in Belgium.
- Singapore is ending service to both Canberra, Australia and Wellington, New Zealand.
- TAP announced six new routes it would operate from Lisbon in 2021: Ibiza, Spain (IBZ), Fuerteventura, Spain (FUE) Oujda, Morocco (OUD), Zagreb (ZAG), and both Djerba (DJE) and Monastir (MIR) in Tunisia.
- United is adding two new destinations to its Washington/Dulles hub: Akron/Canton (CAK), and Key West, FL (EYW).
- Volaris is looking to raise $165 million in liquidity. Me too.
Andrew’s Moment of Levity
You’ll never be as lazy as whoever named the fireplace.