UA sells miles; AA issues stock

Just a few months ago, everyone was worried about some or all of the nation’s major airlines being forced into bankruptcy or liquidation as jet fuel prices went through the roof. But things have eased up considerably as oil has fallen below $100 a barrel, and now two of the nation’s largest airlines are reporting big new injections of cash. United Airlines said it has boosted its liquidity by $1.2 billion, thanks to an extension of its co-branded credit card with Chase Bank, and revisions to its credit card processing agreement. As part of the deal, Chase is making a huge advance purchase of frequent flyer miles for its cardholders, to the tune of $600 million. United can use the cash: The Dallas Morning News reported last week that the airline’s third-quarter earnings will show a $544 million loss from its fuel hedging contracts – advance purchases of fuel that are now worth a lot less since the price of oil dropped so much in the past few months. In any case, United said it has more than $3 billion in “unencumbered hard assets to use to raise additional liquidity if needed.” American Airlines parent AMR Corp., meanwhile, turned to an old-fashioned sale of stock to raise more capital. The 27.1 million shares it issued brought in about $300 million, with the proceeds to be used for general corporate purposes. American said that the company now has a cash balance of $4.9 billion.