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US government agrees $25bn in payroll support for airlines

US government agrees $25bn in payroll support for airlines

United States-based airlines have secured as much as US$25 billion in payroll support from the federal government.

The funds are part of a US$2 trillion relief package signed by Congress in response to the unprecedented economic damage caused the coronavirus pandemic.

Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, United Airlines, SkyWest Airlines and Southwest Airlines are all set to received funds.

United States treasury secretary, Steven Mnuchin, said: “We welcome the news that a number of major airlines intend to participate in the payroll support program.


“This is an important Coronavirus Aid, Relief, and Economic Security (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.”

The support has been offered against a declining background for airlines, with IATA earlier calculating revenue across the sector could fall by $314 billion this year.

Mnuchin added: “Conversations continue with other airlines regarding their potential participation.

“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 finalise the necessary agreements and disburse funds as quickly as possible.

American Airlines said it would accept US$5.8 billion from the scheme.

The funds, which are targeted to support team member salaries and benefits, will come in two forms: a direct grant of $4.1 billion, and a low-interest rate loan of $1.7 billion.

In addition to the $5.8 billion, American expects to separately apply for a loan from the United States treasury of approximately $4.75 billion.

American Airlines chief executive, Doug Parker, commented: “The support our government has entrusted to us carries immense responsibility and an obligation that American Airlines is privileged to undertake.

“We recognise the importance of our service as evidenced by the customers who continue to fly today for important reasons, including medical professionals getting to where they are most needed and family members getting to where they feel most safe.”