US Treasury says it has closed loans to seven major airlines

WASHINGTON / CHICAGO (Reuters) – The US Treasury said on Tuesday that it closed loans to seven large airlines affected by the coronavirus epidemic and urged Congress to save tens of thousands of airline jobs in payroll assistance.

FILE PHOTO: A United Airlines plane was spotted as a passenger in the background at Terminal C of the IAH George Bush Intercontinental Airport in Houston, Texas, US, July 21, 2020, due to an outbreak of coronovirus disease (COVID-19) Is between Connects REUTERS / Latif

The Treasury said in a statement that the seven carriers were Alaska Airlines, American Airlines, Frontier Airlines, JetBlue Airways Corp., Hawaii Airlines, SkyWest Airlines and United Airlines.

Airlines and unions were still fiercely lobbying Congress to put workers on payroll for another six months for a new $ 25 billion bailout before the deadline on Wednesday, but industry officials acknowledged they Some are facing a tough battle for hours.

US Airlines received $ 25 billion under the CARES Act in March, primarily through September as a grant to keep employees on payroll and avoid furloughs.

Treasury Secretary Steven Menuchin on Tuesday urged Congress to expand the payroll assistance program “so we can continue to support aviation industry workers as our economy reopens and we are on the path to recovery . ” Last week, Mnuchin rejected executive action to halt airline layoffs.

House of Representatives Democrats have supported a $ 2.2 trillion measure that would provide direct relief for many hard-hit areas as well as Americans. They have been reluctant to support a stand-alone measure that would only aid airline workers.

Nick Calio, the head of the airline trade group Airlines for America, said on Tuesday that Carrier hopes Congress will work quickly to save these jobs. To save these jobs before 30 September – which is tomorrow – but time is running out.

American Airlines said it acquired a $ 5.5 billion treasury loan on Friday and could spend up to $ 2 billion in October.

Airlines, which continue to burn through $ 5 billion a month, have until September 30 to decide whether to draw from the $ 25 billion US Treasury Loan Fund, which was authorized by Congress in March .

The Treasury said it expects “the initial loan volume to be increased as a result of some major airlines determining not to proceed with certain loans” and the loan could be increased to $ 7.5 billion per carrier.

Airlines have tapped the capital market to increase liquidity, but passenger traffic is still 68% below pre-epidemic levels.

Reporting by David Sheperdsson and Mohammed Zargam; Editing by Eric Beech and Leslie Adler


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