Five U.S. Airlines Reach Loan Agreements with Treasury Department
The U.S. Treasury Department announced Thursday that it has agreed on terms for loans with five major U.S. carriers as part of a $25 billion coronavirus stimulus, according to Al Jazeera.
American Airlines, Frontier Airlines, Hawaiian Airlines, SkyWest Airlines, and Spirit Airlines have signed letters of intent, said the Treasury.
The airline industry has been hit hard by the coronavirus pandemic. While it has rebounded, the travel demand, which has dropped 75% from last year, could be hampered by the spike in new cases.
In addition to a $5.8 billion payroll assistance it received previously, American expects to complete the $4.75 billion Treasury loan in the third quarter.
“We currently anticipate having 20 to 30 percent - or more than 20,000 - more team members on payroll than we need to operate our schedule this fall,” said American Chief Executive Officer Doug Parker and President Robert Isom. “To be clear, this doesn’t mean 20,000 of our team members will be furloughed in October, it simply means we still have work to do to right-size our team for the airline we will operate.”
Hawaiian Airlines was awarded $292 million in payroll assistance and said that it would be eligible for $364 million in Treasury loans.
Spirit received $335 million in payroll assistance and said that it would be eligible for a $741 million Treasury loan.
SkyWest was awarded $438 million in payroll assistance.
“Conversations with other airlines continue,” said Treasury Secretary Steven Mnuchin. “We look forward to finalizing agreements as soon as possible.” Airlines have through September 30 to take the loan.
Six U.S. aviation unions last week demanded another $32 billion payroll aid aimed at hiring hundreds of thousands of employees by March 31, 2021.