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United Airlines to raise $1 billion in stock offering

Company lists government aid as one of risk factors from coronavirus

Eric Kulisch
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A United Airlines A320 takes off from Las Vegas Airport. (Photo: Flickr/Tomás Del Coro)

United Airlines Holdings Inc. (NASDAQ: UAL) late Tuesday announced the sale of 39 million shares of new stock to raise $1 billion and bolster its liquidity as it tries to ride out the meltdown of the travel market caused by the coronavirus pandemic.

The price of the public offering, which is expected to close April 24, was set at $26.50 per share.

The airline said Monday it was $2 billion in the red during the first quarter and painted a bleak financial picture for the rest of the year on the expectation customers will be slow to return to the skies even when the outbreak dissipates. Planes are flying nearly empty and United plans to cut domestic capacity to 10% in May and June.

The Chicago-based carrier has been scrambling for money to bolster ongoing operations at a time when revenue has slowed to a trickle. It is receiving $5 billion in workforce assistance grants from the federal government to maintain employment levels and intends to apply for a $4.5 billion federal loan. It also borrowed an additional $2.75 billion and sold 22 aircraft that are on order to a Chinese leasing company.


The emergency government aid comes with strings attached — no payment of dividends, no stock repurchases, no layoffs for six months, requirements to maintain certain levels of scheduled service and issue warrants for common stock to the U.S. Treasury — and United said in a financial filing the restrictions could tie its hands in future strategic decisions. It singled out the limitation on executive compensation, which could extend up to six years depending on the form of the aid, as having the potential to impact its ability to attract and retain senior management and other key employees.

In the filing, United warned that COVID-19 could materially impact finances in a number of ways, including poor returns from investments in other airlines.

United stock rose slightly to $27.88 in trading Tuesday, but fell 3% in extended trading. Shares have lost two-thirds of their value in the past three months.

Morgan Stanley and Barclays are underwriting the stock offering.


Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He won Environmental Journalist of the Year from the Seahorse Freight Association in 2014 and was the group's 2013 Supply Chain Journalist of the Year. In December 2022, Eric was voted runner up for Air Cargo Journalist by the Seahorse Freight Association. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. He has appeared on Marketplace, ABC News and National Public Radio to talk about logistics issues in the news. Eric is based in Vancouver, Washington. He can be reached for comments and tips at [email protected]