United Airlines (NYSE:UAL) on Monday reported a $2.1-billion loss for first quarter as the coronavirus pandemic drove travel demand down to the lowest level in decades.
The Chicago-based airline said has applied for up to $4.5 billion in government loans on top of about $5 billion federal payroll grants and loans it also expects to receive to weather the crisis.
United is the first major U.S. airline to detail the results of the virus on its results in the first three months of the year. The disease and harsh measures to stop it from spreading such as stay-at-home orders has ravaged air travel demand and prompted carriers to slash most of their flights.
United said it submitted an application to loan program under the CARES (Coronavirus Air, Relief and Economic Security) Act, which has a term of up to five years.
If the company borrows up to $4.5 billion, it will be obligated to issue warrants for the government to buy 14.2 million shares, or about 5.7% of the shares outstanding, at a strike price of $31.50, which is 8.3% above Friday's closing price of $29.08.
United also expects to receive $5.0 billion through the Payroll Support Program (PSP) under the CARES Act, which will require United to issue warrants to buy 4.6 million shares (1.9% of the shares outstanding).
The stock has lost 67.6% over the past three months through Friday.
United shares were grounded $1.35, or 4.7%, to $27.72
