U.S. Treasury Announces $2.9 Billion in Airline Aid
The U.S. Treasury Department stated Monday it had disbursed $2.9 billion in preliminary payroll assistance to 54 smaller passenger service and two major passenger airways, while it finalized grant deals with six major airlines.
The Treasury is giving major airlines 50% of funds and releasing the rest in a series of installments. In total, Treasury is granting U.S. passenger carriers $25 billion in funds allocated for payroll prices. Major airlines should repay 30% of the funds in low-interest loans and grant Treasury warrants equal to 10% of the loan amount, whereas airlines receiving $100 million or less don’t must repay any funds or issue warrants to the federal government.
Treasury stated Monday it had finalized grant deals with Allegiant Air, American Airlines Group, Delta Air Lines, Southwest Airlines, Spirit Airlines, and United Airlines Holdings.
Air carriers have been crushed by the coronavirus pandemic and seen U.S. travel demand plunge by 95%.
Southwest stated it would obtain half of the $3.2 billion payroll award immediately and the rest in installments throughout May, June, and July.
Individually, Treasury stated Alaska Airlines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, and SkyWest Airways had also signaled that they planned to participate. The 12 main airways signify almost 95% of U.S. airline capacity.
Airlines receiving funds can’t lay off employees before September 30 or change collective bargaining agreements and should agree to limitations on buybacks, executive compensation, and dividends.