Treasury Hands Out $2.9 Billion to Airlines; More to Come

(Bloomberg) -- The U.S. Treasury Department disbursed $2.9 billion to passenger airlines in the first round of payroll assistance to an industry suffering financially from a pandemic-induced shutdown.

The assistance that has been handed out so far went to two “major” airlines and 54 smaller passenger carriers, the department said in a statement late Monday. More payments will be sent out on a rolling basis, it said.

The Treasury Department didn’t say which carriers received the money yet. However, it said American Airlines Group Inc., Delta Air Lines Inc., Southwest Airlines Co. and United Airlines Holdings Inc., have struck agreements for aid.

The Treasury also announced that Allegiant Air Inc. and Spirit Airlines Inc. have also reached a deal for payroll assistance.

Five others have said they plan to participate: Alaska Air Group Inc., Frontier Airlines, Hawaiian Airlines, JetBlue Airways, and SkyWest.

Separately, Southwest Airlines announced that it finalized terms with the Treasury and will receive more than $3.2 billion in disbursements over the next several months.

The deal allows Southwest to receive an immediate payment of about $1.6 billion with the remainder being paid in installments during May, June, and July, the company said.

The aid gives U.S. carriers resources to limp along as the Covid-19 pandemic and government travel restrictions has erased most demand for commercial flying and plunged the world’s airlines into their worst-ever crisis.

In the U.S., the industry is projected to burn through $10 billion to $12 billion a month, according to trade group Airlines for America, and carriers have cut capacity as much as 80% while parking thousands of planes.

©2020 Bloomberg L.P.

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