Five US airlines strike deals with Treasury Department for billions in coronavirus loans
American Airlines Boeing 787-8 Dreamliner.
Nicolas Economou | NurPhoto | Getty Images
Five airlines have reached deals with the Treasury Department for $ 25 billion portions of federal loans aimed at mitigating the blow of the coronavirus pandemic on their businesses.
American Airlines, Hawaiian Airlines, Sky West Airlines companies, Spirit Airlines and private company Frontier Airlines signed letters of intent for the loan terms, the Treasury Department said Thursday.
Other airlines have said they expect to be eligible for billions in federal loans but have yet to sign letters of intent, although conversations are ongoing, a spokeswoman for the Treasury Department.
American airlines, displaying their first losses in years due to the virus, were allowed to apply for a portion of the $ 25 billion in federal loans, funding set aside under the CARES Act in March.
The Treasury Department did not disclose the amounts and terms of the loans, for which airlines were required to build up equity, warrants or senior debt to compensate taxpayers. But the executives previewed how much they expect to receive.
American Airlines CEO Doug Parker told staff the airline plans to finalize the $ 4.75 billion loan in the third quarter. Last month, he told shareholders the carrier plans to use cash flow from its AAdvantage frequent flyer credit card as collateral.
In the spring, U.S. airlines began receiving portions of an additional $ 25 billion in aid that secures jobs in the industry until September 30, a relief desired by airline unions. expanded until next March.