Slammed by high fuel prices, scads of airline companies are tapping the capital markets to boost liquidity. Atlanta’s Delta Air Lines was the latest, this week tapping its entire 
$1 billion revolving credit facility.
US Airways Group Inc. got in on the act earlier this month, issuing more than 21 million shares of its common stock, raising about $179 million. Although it’s headquartered in Tempe, Ariz., US Airways leaned on McKenna Long & Aldridge partner Stacy Ingram of Atlanta as its lead securities counsel.
The share sale was done on an extremely tight time frame, Ingram said. US Airways and its lead underwriter, Merrill Lynch, wanted to conduct the sale to take advantage of relatively low prices for jet fuel. When jet fuel costs drop, that tends to boost the value of airline stocks, she said.
“There is such a close relationship between oil prices and the stock prices of the airlines,” Ingram said.
US Airways also wanted to conduct the share sale before the end of August, considered one of the slowest times of the year in the stock market and one of the worst times to conduct a public offering, she said.
McKenna partner David Brown and associates Jim Thornton and Monique Gonzalez worked with Ingram. Cleary Gottlieb Steen & Hamilton advised Merrill Lynch.
US Airways’ and Delta’s stock sales come amid one of the worst downturns in airline history
. High fuel prices sent seven of the biggest U.S. airlines to combined net losses of $5.9 billion in the second quarter, Bloomberg News said.
Issuing new stock isn’t the only way airlines are coping with the financial pressures. Airlines have added fees for checking baggage, required travelers to give up more frequent-flyer points to obtain free tickets, eliminated jobs and reduced the number of flights to cut costs.
As for Delta tapping its revolving credit facility, Delta Chief Financial Officer Ed Bastian said that the company didn’t need the cash for its operations, but to allow for some wiggle room as it begins its integration with Northwest Airlines. Delta earlier this month received antitrust approval from the European Commission to merge with Northwest.