White House, major airlines reach terms for $25B bailout

White House, major airlines reach terms for $25B bailout

Major airlines and the Treasury Department have reached terms for a $25 billion coronavirus bailout to prevent layoffs after a severe plunge in demand.

The funds, approved last month by Congress as part of a more than $2 trillion stimulus bill, will be distributed to companies that agree not to furlough workers before Oct. 1.

American Airlines said Tuesday in a statement that it will receive $5.8 billion — including a $4.1 billion grant and a $1.7 billion low-interest loan.

Other airlines did not immediately specify the amounts they will receive under the so-called Payroll Support Program, set up to offset a more than 90 percent dip in passengers.

The Treasury Department did not immediately specify terms reached with companies, but said funds are expected to also go to Alaska Airlines, Allegiant Air, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, United Airlines, SkyWest Airlines and Southwest Airlines.

“This is an important CARES Act program that will support American workers and help preserve the strategic importance of the airline industry while allowing for appropriate compensation to the taxpayers,” Treasury Secretary Steve Mnuchin said in a statement.

“Conversations continue with other airlines regarding their potential participation,” Mnuchin said.

“Treasury is also working to review and approve applications for smaller passenger air carriers as quickly as possible and will provide further guidance for cargo carriers and contractors very soon. We look forward to working with the airlines to finalize the necessary agreements and disburse funds as quickly as possible.”

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