US Treasury seals loan deals with 5 major airlines

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In a press statement, the Treasury Department said that American Airlines, Frontier Airlines, Hawaiian Airlines, Sky West Airlines, and Spirit Airlines have signed letters of intent setting out the terms on which Treasury would extend loans under a relevant provision of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. — Courtesy photo
In a press statement, the Treasury Department said that American Airlines, Frontier Airlines, Hawaiian Airlines, Sky West Airlines, and Spirit Airlines have signed letters of intent setting out the terms on which Treasury would extend loans under a relevant provision of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. — Courtesy photo

WASHINGTON — The United States Treasury Department announced on Thursday that it has struck deal with five US airline companies for portions of $25 billion in federal loans aimed at softening the blow of the coronavirus pandemic on their businesses.

In a press statement, the Treasury Department said that American Airlines, Frontier Airlines, Hawaiian Airlines, Sky West Airlines, and Spirit Airlines have signed letters of intent setting out the terms on which Treasury would extend loans under a relevant provision of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Commenting on the agreement, Treasury Secretary Steven T. Mnuchin said: “We are pleased that major air carriers intend to use this important program and for Treasury to use its authority under the CARES Act to provide much-needed financial assistance while ensuring appropriate taxpayer compensation.”

“Conversations with other airlines continue, and we look forward to finalizing agreements as soon as possible.”

One of the relevant provisions of the CARES Act authorizes the Department of the Treasury to make loans to eligible businesses related to losses incurred as a result of the coronavirus pandemic. It requires borrowers to provide warrants, equity interests, or senior debt instruments as appropriate taxpayer compensation. Participating borrowers must also commit to certain requirements under the CARES Act to maintain employment levels and limit employee compensation, dividends, and share repurchases, the statement added.

Meanwhile, a Treasury Department spokeswoman said that other airline companies also expect to be eligible for billions in federal loans but haven’t yet signed letters of intent, though conversations are ongoing.

The Treasury Department didn’t disclose the amounts and terms of the loans, for which airlines were required to put up equity, warrants, or senior debt to compensate taxpayers. But executives have been previewing the amount they expect to receive. — Agencies


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