US airlines agree to accept stimulus funds, says Treasury

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American Airlines, Southwest Airlines, Delta Airlines and United Airlines are among those who accepted the bailout offer, said Secretary of the Treasury Steve Mnuchin in a statement.

Mnuchin said the department “is also working to review and approve requests from small passenger airlines as quickly as possible” and that it will begin discussions with freight carriers “very soon”.

The package includes a combination of grants, which the airlines do not need to repay, and low-interest loans, which the airlines and unions have strongly resisted. Ongoing discussions on what the Treasury Department would receive from airlines have delayed the deal.

American said it expects to receive $ 5.8 billion from the fund: $ 4.1 billion in grants and $ 1.7 billion in loans. It will also ask for $ 4.75 billion in additional loans.

“With this level of assistance, we now believe that we have the financial resources to help us weather this crisis and be able to serve the traveling public when they are ready to fly,” wrote the US CEO Doug Parker and President Robert Isom. employees in an internal message.

Southwest Airlines has stated that it expects to receive $ 3.2 billion, of which nearly $ 1 billion will be in the form of a loan. The airline said it plans to repay the loan in a decade and is securing the loan with stock warrants.

$ 2 trillion coronavirus stimulus bill signed by President Donald Trump last month includes more than $ 58 billion to support the aviation industry – half to help airlines finance employee salary costs until September.

Although there is a demand for freight flights, interest in passenger travel has almost ceased due to the coronavirus pandemic.

Passenger numbers dropped 96% and airlines canceled more than 70% of their flights. Only one seat in 10 travels with a paying passenger. An association of international airlines raised estimates for global industry losses to $ 314 billion on Tuesday. Tens of thousands of airline workers have taken unpaid leave, and others in the aviation industry have lost their jobs.

In return for accepting the funds, the airlines must accept prohibitions on share buybacks and layoffs and executive compensation limits. Airlines must also provide at least a minimum level of service – as little as one flight per week – to destinations currently served.

The payments were due to the airlines more than a week ago, but the airlines and the government were stuck in interest on the Treasury, recovering part of the amount paid. The government has asked airlines to repay up to 30% of the amount in the form of a low-interest loan. This does not apply to small airlines.

Aviation unions have sided with the airlines, urging the government to demand as little as possible from the airlines. Asking too much, unions said, could cause airlines to not accept the aid, which could cost hundreds of thousands of jobs.

A major flight attendants’ union, the Association of Flight Attendants, called the final terms “an unprecedented achievement,” but said Mnuchin “decided to play games with this aid, rather than deliver it.” the manner provided by Congress in the bipartisan agreement ”.

The Department of Transport announced on Tuesday separately how it would allocate about $ 10 billion in aid to airports across the country.

This story has been updated with additional details.

CNN’s Evan Perez contributed to this report.

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