• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Privacy Policy
  • Contact Us
  • Ask Scott
Travel Codex

Travel Codex

Your Resource for Better Travel

  • Subscribe
  • Credit Cards
  • Reviews
  • Guides & Tips
  • Award Travel

United Airlines And British Airways Looking To Sell Assets To Raise Cash

by Steve Case
Last updated November 7, 2022

Are you looking to own part of an airline?  The aviation industry is still trying to recover and some airlines need a cash infusion.  With a slow recovery in the travel industry, United Airlines and British Airways may be looking to trade some assets for cash.

a plane flying in the sky
British Airways Airbus A380. Photo credit: British Airways.

British Airways

I’ll start with British Airways first because its owner, International Airlines Group (IGA) not only owns British but also owns:

  • Aer Lingus,
  • Iberia,
  • Level and
  • Vueling.

British Airways operates 533 aircraft to 279 destinations.  British Airways is trying to grow the business back after flying 118 million passengers the year before the pandemic hit.  Travel restrictions, people not willing to fly at this time coupled with an annual winter downturn in business has impacted its cash flow.

While British, Aer Lingus and Iberia are full-service airlines, Level and Vueling are IGA’s airlines in the budget sector.  At this time, IAG is only looking at the assets of British Airways to bolster their balance sheet.  Players that could buy assets would be investment funds and other large players already in the industry.  Other alternatives would be into looking at partnerships and joint ventures.  The UK and other countries have reduced travel restrictions along with an increase in vaccinated travelers will help the airline increase revenue.  Will it be enough?

With the process being in the early stages, the airline may be looking at raising funds from selling stakes in:

  • Aircraft,
  • Frequent-fly programs and
  • Cargo operations.
an airplane flying in the sky
United Airlines Boeing 777. Photo credit: United Airlines.

United Airlines

United Airlines is also in the hunt for cash.  In addition to the same problems facing British Airways and its parent IAG, United also has more than 500 new aircraft on order.  United’s CEO Scott Kirby was highly ambitious in ordering so many aircraft without a huge source of capital during the travel recovery.

Hyatt Privé: Addition Perks and NEW Discounts
Trending
Hyatt Privé: Addition Perks and NEW Discounts

A needed infusion of cash could come from selling a stake in the United Airlines MileagePlus program.  The sale of their frequent-flyer program would have the least impact on the airline.  Selling some of MileagePlus could raise a huge amount of cash without issuing new debt (loans and bonds) or equity from increasing the number of United Airlines Holdings shares.  United Airlines valued the MileagePlus program at almost $22 billion in 2020.  Selling a stake in MileagePlus, since it is an ancillary division could bring in cash without yielding direction of the management or mainline operations unlike the sale of hard assets may have.

United could be the first U. S. carrier to sell a stake in a frequent-flyer program.  In evaluating the sale of a stake of MileagePlus, up to 15% of the program could go up for sale.  Discussions are in the early stages and United could end up deciding against the sale.

Airline Profit Centers

Major airlines have multiple profit centers besides the obvious transporting of passengers from point A to point B.  These other profit centers typically include:

  • Air cargo operations,
  • Charter flights,
  • Vacation packages,
  • Frequent-flyer programs and
  • Contract services for aircrew training and aircraft servicing.

Frequent-flyer programs are a huge cash cow for airlines.  They can operate these programs with minimal expense and they can partner with other travel vendors, financial institutions, branded credit cards, shopping portals and more.  For an airline, this would be the least painful asset to sell.

Final Thoughts

The financial recovery for the travel industry has been slow and hard-fought.  It may take another two years for airlines to get back to some semblance of normal.  The sale of any stake of a frequent-flyer program could gain large amounts of badly needed cash without giving up management control or issuing new debt.  These airlines are at the beginning of discussions, we’ll have to see what develops over the coming months.

 

  • 2shares
  • Twitter
  • Facebook
  • LinkedIn
  • Email

Read This Next

  • British Airways Man Vs A380 Race
  • a screenshot of a map
    British Airways A380 Aborts Seconds Before Landing
  • a seat with pillows and a lamp on the side
    British Airways Extends Discounts for AARP Members

About Steve Case

Steve is a life-long avgeek and a points and miles player. The photo is from my first premium, international award flight in 2012. That is all it took, I was hooked. I used my airline mile and hotel points to travel well and cheap. I am truly an "out-of-the-box" traveler which has enriched my travel experiences.

Primary Sidebar

Over 100K+ Followers

Subscribe to updates from Travel Codex

none

Learn to how to find the cheapest awards.

Search Now

none

Transfer points to get more value.

See Options

none

Compare credit cards to earn more miles.

Explore Offers

Contact

If you have a question or would like to make a press inquiry, please contact:

Scott Mackenzie
Editor in Chief
scott@travelcodex.com

For updates:
Subscribe to RSS
Subscribe to Apple News

Privacy Policy


© Travel Codex, LLC All Rights Reserved.


Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Travel Codex with appropriate and specific directions to the original content.