Airlines, Treasury reach deal on $25B coronavirus relief package
Package will provide cash to embattled airlines among other benefits
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The U.S. Treasury Department and the major U.S. airlines have reached a deal on the $25 billion coronavirus relief package.
U.S. Treasury Secretary Steven T. Mnuchin issued the following statement on the Payroll Support Program for passenger air carriers:
“We welcome the news that a number of major airlines intend to participate in the Payroll Support Program. This is an important CARES Act program that will support American workers and help preserve the strategic importance of the airline industry while allowing for appropriate compensation to the taxpayers.
“Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, United Airlines, SkyWest Airlines, and Southwest Airlines have told us that they plan to participate in the Payroll Support Program. Conversations continue with other airlines regarding their potential participation. Treasury is also working to review and approve applications for smaller passenger air carriers as quickly as possible and will provide further guidance for cargo carriers and contractors very soon. We look forward to working with the airlines to finalize the necessary agreements and disburse funds as quickly as possible.”
American Airlines released the following details on its $5.8 billion assistance as part of the package.
"The funds, which are targeted to support team member salaries and benefits, will come in two forms: a direct grant of $4.1 billion, and a low-interest rate loan of $1.7 billion. In addition to the $5.8 billion, American expects to separately apply for a loan from the U.S. Treasury of approximately $4.75 billion," American said in a press release.
“The Payroll Support Program recognizes the extraordinary dedication of our entire team, and importantly, sustains the critical air service being provided by our frontline team members,” said American CEO Doug Parker.
Specifics from the other airlines, including Delta, United, Southwest and JetBlue, are expected.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DAL | DELTA AIR LINES INC. | 49.90 | +1.96 | +4.08% |
| UAL | UNITED AIRLINES HOLDINGS INC. | 53.51 | +0.84 | +1.59% |
| AAL | AMERICAN AIRLINES GROUP INC. | 14.13 | +0.21 | +1.51% |
| LUV | SOUTHWEST AIRLINES CO. | 27.25 | -2.04 | -6.96% |
| JBLU | JETBLUE AIRWAYS CORP. | 5.72 | -0.19 | -3.21% |
On Monday, FOX Business reported that a deal was imminent with some preliminary conditions.
“We have determined what portion of the payments we think does not represent a direct benefit to federal taxpayers, and for that amount, we are seeking compensation,” Brent McIntosh, the undersecretary of the Treasury for International Affairs, told FOX Business then.