Seven Airlines Close Billions of Dollars in Loans With Treasury


American Airlines has secured a $5.5 billion loan facility that could be increased to $7.5 billion, the most the Treasury will allow any one airline to borrow.


Angus Mordant/Bloomberg News

The U.S. Treasury said it has closed loans to seven passenger airlines and joined with the industry to call on Congress to extend more aid to prevent massive job cuts later this week.

Airlines continue to grapple with a sharp drop-off in travel because of the coronavirus pandemic and accompanying restrictions. The loans were one of two major sources of aid to airlines under the Cares Act passed in March. Airlines also received $25 billion to continue paying workers through the summer.

Airlines have said they’ll furlough more than 30,000 workers Thursday when the job protections that accompany that aid expire, with

American Airlines

Group Inc. and United Airlines Holdings Inc. accounting for the bulk of the cuts.

The Treasury said Tuesday it closed loans to American Airlines, United Airlines, Alaska Airlines, Frontier Airlines,

JetBlue Airways Corp.

JBLU -4.44%


Hawaiian Airlines

HA -3.89%

and SkyWest Airlines. The announcement comes days after American said it had secured a $5.5 billion loan facility that could be increased to $7.5 billion, the most the Treasury will allow any one airline to borrow. The Treasury didn’t say how much other airlines agreed to borrow.

These airlines will be able to receive more money than they originally anticipated after others, including

Delta Air Lines Inc.


Southwest Airlines Co.

, decided to forgo their share.

Airlines and unions are in the final hours of a major lobbying push to secure another six months’ worth of funds to avert the furloughs.

Treasury Secretary Steven Mnuchin said in a statement Tuesday: “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.”

Democrats in the U.S. House of Representatives this week included more than $25 billion for airlines in their latest aid proposal, which could come up for a vote in the House as soon as Wednesday. Lawmakers and industry officials have grown more pessimistic about the prospects of a broader agreement before Oct. 1, but House Speaker Nancy Pelosi (D., Calif.) told reporters after a meeting with Mr. Mnuchin Tuesday that she was hopeful they could reach a deal this week.

Write to Alison Sider at [email protected]

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the September 30, 2020, print edition as ‘Treasury Closes 7 Airline Loans.’

Source link