United Airlines borrows $2 billion as coronavirus slams industry

FILE PHOTO: A United Airlines passenger jet taxis at Newark Liberty International Airport, New Jersey, U.S. December 6, 2019. REUTERS/Chris Helgren/File Photo

(Reuters) - United Airlines UAL.O said on Thursday it had borrowed $2 billion to cope with an unprecedented disruption to the travel industry as the coronavirus pandemic leads to widescale flight cancellations and global travel bans.

U.S. President Donald Trump stunned an already battered airline sector late on Wednesday with a 30-day ban on flights from continental Europe, deepening the sector’s misery and piling pressure on governments to offer emergency support.

Several U.S. and European companies have been scrambling in recent days to draw down funds from existing credit lines and in some cases take out new lending as the impact of the outbreak on growth unfolds.

Boeing Co BA.N also said on Wednesday it was planning to draw down the rest of a $13.8 billion loan it agreed last month.

United Airlines said it had borrowed the full amount of the term loan facility on March 9, with proceeds used to pay transaction fees and expenses and for other capital needs.

The principal amount of the loan needs to be repaid in a single installment by March 8, 2021.

The World Health Organization described the new coronavirus as a pandemic on Wednesday.

Reporting by Rachit Vats and Noor Zainab Hussain in Bengaluru; Editing by Maju Samuel and Saumyadeb Chakrabarty