Delta Air Lines (NYSE:DAL) said Monday that it intends to raise $6.5 billion in new debt backed by its SkyMiles frequent-flyer program, becoming the latest airline to tap its loyalty program for cash.

In a regulatory filing, Delta said it intends to sell senior secured notes and enter into a new credit facility backed by SkyMiles.

Airlines have been hit hard by the COVID-19 pandemic, which has squelched travel demand. The companies are burning through millions per day during the pandemic, and most in the industry believes traffic will not return to pre-pandemic levels until late 2021 at the earliest.

A Delta plane taking off.

Image source: Delta Air Lines.

In its filing, Delta said it expects third-quarter total available seats to be down 60% versus the third quarter of last year, with international capacity down 80% and domestic down 50%. As a result of flying fewer flights, Delta said it has parked about 40% of its mainline fleet.

Many of Delta's rivals have already used frequent flyer programs to raise cash. United Airlines Holdings (NASDAQ:UAL) and American Airlines Group (NASDAQ:AAL) earlier this summer said they would borrow on their loyalty programs to raise about $5 billion each.

Although issuing miles creates a liability, since the miles can be redeemed for future flights, airlines have turned the programs into a source of revenue by selling the miles to partners for affinity programs. Those programs have held up better than the core airline business through the pandemic. Delta said that while total miles redeemed fell by 78% year over year in the first half of 2020, revenue from the sale of miles to credit card partner American Express fell by just 5% to $1.9 billion.

Delta also said that it intends to forgo tapping $4.6 billion in loans from the U.S. Treasury authorized under the CARES Act, sticking to private sources of financing instead. Southwest Airlines (NYSE:LUV) has already said it would not pursue a Treasury loan, while American has said it will take funding from the government.

Delta had more than $15 billion in total liquidity as of the end of the second quarter.