Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ The US Treasury Department has said it has closed loans to seven major airlines

The US Treasury Department has said it has closed loans to seven major airlines



By David Shepardsson and Tracy Ruczynski

WASHINGTON / CHICAGO (Reuters) – The US Treasury Department said Tuesday it had closed loans to seven major airlines hit hard by the coronavirus pandemic, and called on Congress to save tens of thousands of airline jobs by providing billions. .

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

Airlines and unions were still actively lobbying Congress before Wednesday’s deadline for a new $ 25 billion bailout plan to keep workers paid for another six months, but industry officials acknowledged they were facing a tough battle within hours.

U.S. airlines received $ 25 billion in March under the CARE Act, mainly in the form of grants to keep employees paid in September and avoid abandonment.

Finance Minister Stephen Mnuchin on Tuesday called on Congress to extend the wage support program “so that we can continue to support workers in the aviation industry when our economy reopens and continue on the road to recovery.”

; Last week, Mnuchin rejected executive action to prevent airline layoffs.

House Democrats backed a $ 2.2 trillion measure that would provide assistance to many affected sectors, as well as direct relief for Americans. They are reluctant to support a stand-alone measure that would only help airlines.

Nick Calio, who heads Airlines for America, said Tuesday that carriers “remain hopeful that Congress will act quickly to save these jobs before the September 30 deadline – which is tomorrow – but time is running out.”

American Airlines said on Friday it had secured a $ 5.5 billion loan from the Treasury and could receive up to $ 2 billion more in October.

The airlines, which together continue to burn up to $ 5 billion a month, must decide by September 30 whether to draw from a $ 25 billion US Treasury loan, which was approved by Congress in March.

The finance ministry said it expects “the initial loan amounts to be increased as a result of the decision by some major airlines not to move forward with loans” and could increase loans to $ 7.5 billion per carrier.

Airlines have also used capital markets to boost liquidity, but passenger traffic is still declining by 68% from pre-pandemic levels.

(Report by David Shepherdson and Mohammad Zargam; Editing by Eric Buich and Leslie Adler)


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