United Airlines may sell stake in MileagePlus

United Airlines Holdings is considering selling a minority stake in its wholly-owned frequent flyer unit MileagePlus, sources close to the matter who wished to remain anonymous told Bloomberg News.

The United Airlines (UA, Chicago O’Hare) parent is working with certain financial advisers on planning this potential move for its lucrative loyalty subsidiary, and they have started to contact potential investors including private equity firms, the sources claimed.

One of the insiders said that the minority stake in the MileagePlus business would likely be under 15%. Discussions are still at an early stage, the sources stressed, and United may eventually decide not to proceed.

Approached for comment, United Airlines told ch-aviation: “We are not commenting on this speculation.”

United reorganised MileagePlus into a wholly-owned subsidiary in 2020, valuing it at around USD22 billion, and then used it in June of that year as collateral for a USD6.8 billion debt sale involving bonds and loans to help it manage cash flow as it navigated the first year of the pandemic. It was the biggest ever such sale in the aviation sector at that stage until Delta Air Lines (DL, Atlanta Hartsfield Jackson) raised at least USD9 billion that September, also secured with its wholly-owned frequent flyer programme.

Some of the sources suggested to Bloomberg that United is merely pursuing the sale to highlight the significant value of its mileage portfolio. But a sale would bolster the balance sheet without the carrier having to resort to selling new debt or equity.