Delta, Southwest Lay Groundwork to Take Federal Loans If Needed
(Bloomberg) -- Delta Air Lines Inc. and United Airlines Holdings Inc. are among major airlines that may tap a federal loan program as the industry copes with the coronavirus pandemic damages, the Treasury Department announced Tuesday.
Southwest Airlines Co. and JetBlue Airways Corp. have also told the agency that they may need a share of the $25 billion pandemic relief loan program that Congress allotted for the industry. Last week, the Treasury Department said that American Airlines Group Inc., Frontier Airlines, Hawaiian Airlines, SkyWest, and Spirit Airlines also indicated that they may take the federal aid, with American confirming it would borrow the funds.
An undisclosed amount is available to the airlines “if they so choose,” Treasury Secretary Steven Mnuchin said in a statement.
The government’s loan program is designed as a backstop and the companies still have the option to look for private financing, or forgo the loan completely, according to the Treasury Department.
The loans come with strings attached, including curbs on executive pay, a government stake and limits on payroll reduction.
“These airlines are among the companies most heavily affected by the disruptions to social and economic activity caused by the pandemic,” Mnuchin said in the statement.
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