By Leslie Josephs@LESLIEJOSEPHS
Source: www.cnbc.com, September 2020
- The Treasury Department said it has closed loans with seven U.S. airlines.
- Because Delta and Southwest opted to stick with private markets, Treasury will make larger loans than expected to some carriers.
- American Airlines last week said it expects $7.5 billion will ultimately be available to it under the program, after it secured $5.5 billion.
The Treasury Department on Tuesday said airlines could receive larger federal loans than previously expected after some carriers opted out, freeing up more funds in the program.
Congress in March approved $25 billion in federal loans for U.S. passenger airlines to help them weather the coronavirus pandemic, which has kept air travel demand at roughly 30% of last year’s levels.
Airlines have until Wednesday to decide whether to take the federal loans.
American last week said it secured $5.5 billion from the program, more than the $4.75 billion it had expected to receive. The Fort Worth-based carrier said it expects it will have up to $7.5 billion available, the maximum amount for a single carrier.
U.S. passenger airlines also received portions of $25 billion in payroll support, mostly grants, from the government. Those funds prohibit carriers from cutting jobs until Oct. 1, but in just hours, the airlines, mostly American and United, plan to cut more than 30,000 jobs.
“We call on Congress to extend the Payroll Support Program so we can continue to support aviation industry workers as our economy reopens and we continue on the path to recovery,” Treasury Secretary Steven Mnuchin said in the statement.