CHICAGO (NewsNation Now) — The U.S. Treasury Department announced Tuesday it closed loans to seven major U.S. airlines and aviation workers.
The airlines include Alaska, American, Frontier, JetBlue, Hawaiian, SkyWest and United.
The Treasury will distribute $25 billion in funding for airlines that Congress approved in the CARES Act earlier this year. It expects initial loan amounts per airline to increase due to some of the airlines determining not to move forward with the loans due to the availability of private financing. However, under the terms, no airline will receive more than a $7.5 billion loan.
The CARES Act authorizes the Treasury Department to make loans to provide liquidity to eligible businesses related to losses incurred as a result of the coronavirus pandemic. It requires borrowers to provide warrants, equity interests, or senior debt instruments as appropriate taxpayer compensation. Participating borrowers must also commit to certain requirements under the CARES Act regarding the maintenance of employment levels and limiting employee compensation, dividends, and share repurchases.
“The payroll support and loan programs created by the CARES Act have saved a large number of aviation industry jobs, and kept workers employed and connected to their healthcare, during an unprecedented time,” Treasury Secretary Steven Mnuchin said in a statement. “We are pleased to conclude loans that will support this critical industry while ensuring appropriate taxpayer compensation. 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.”
The airlines have until Sept. 30 to accept the CARES Act-sanctioned loan.
