U.S. Treasury Announces Loan Agreements With Five Major Airlines
By Alison Sider and Kate Davidson
The U.S. Treasury Department finalized terms of loans to five
major airlines as part of an aid program to help the industry
weather the coronavirus pandemic.
The Treasury said that American Airlines Group Inc., Frontier
Airlines, Hawaiian Airlines, SkyWest Airlines and Spirit Airlines
Inc. had agreed to loan terms and signed letters of intent.
Air travel fell sharply this spring as government restrictions
on travel and fears of infection kept passengers from flying. While
air travel has started to rise, demand remains a fraction of what
it was a year ago and airline executives have said they expect a
full recovery will likely take years.
These are the first airlines to accept government loans from a
$25 billion pool Congress earmarked under the Cares Act, the $2.2
trillion economic stimulus package passed in March. Major carriers
have also received another $25 billion in federal aid to pay
workers through the end of September to avoid mass layoffs they
said would have been inevitable otherwise.
The Treasury didn't detail the amounts of the loans or the
terms, but said the borrowers would have to provide warrants,
equity stakes, or senior debt instruments. The Treasury said it is
continuing discussions with other carriers that are eligible for
American Airlines has previously said it would be eligible for
loans of as much as $4.75 billion, and that it was seeking to
pledge its frequent flier program as collateral.
Write to Alison Sider at email@example.com and Kate Davidson
(END) Dow Jones Newswires
July 02, 2020 09:39 ET (13:39 GMT)
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