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U.S. not bailing out airlines, Boeing not using federal money: Treasury Secretary

Stock MarketsMar 27, 2020 09:50AM ET
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© Reuters. FILE PHOTO: Treasury Secretary Steve Mnuchin takes a phone call in the hall outside a meeting to wrap up work on coronavirus economic aid legislation

WASHINGTON (Reuters) - U.S. Treasury Secretary Steve Mnuchin said on Friday that the coronavirus economic stimulus bill before Congress is not an airline bailout and that taxpayers will be compensated for relief given to companies hobbled by the global pandemic.

At the same time, Mnuchin said in an interview with Fox Business Network that plane-maker Boeing Co (N:BA) has not requested government help.

"I've been very clear this is not an airline bailout," Mnuchin said. "And that taxpayers need to be compensated for relief they're giving to airlines."

U.S. airlines are preparing to tap the government for up to $25 billion in grants to cover payroll in a sharp travel downturn triggered by the coronavirus, even after the government warned it may take stakes in exchange for bailout funds, people familiar with the matter said.

Mnuchin can demand equity, warrants or other financial instruments in order to "provide appropriate compensation to the federal government." A Treasury spokeswoman declined to comment on a report that Mnuchin would demand equity.

Airlines can ask for the equivalent of their payroll between April 1 and Sept. 30 of last year, according to the terms of the bill, meaning some large airlines could get $4 billion or more in total.

The House of Representatives planned to debate the legislation on Friday, then schedule a vote.

Mnuchin said Boeing said it does not intend to participate in the federal program. "Boeing has said that they have no intention of using a program that may change in the future," Mnuchin said. "These are things that the companies need to come and ask us for. ... Right now Boeing's saying they don't need it."

Asked if the large stimulus bill could help avoid a recession, Mnuchin told Fox Business, "The No. 1 issue is not what the economic numbers are right now, the No. 1 issue is the hardship to the American people who are losing their jobs."

U.S. not bailing out airlines, Boeing not using federal money: Treasury Secretary
 

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Comments (6)
Nick Gee
Nick Gee Mar 28, 2020 12:54AM ET
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I watch Reuters all the time.They are about as fact based non-bias as they come.Even blatant things that could get reported politically....do not.Might wanna pull your head out of your ******* Hope you got TP
Ed Caffrey
Ed Caffrey Mar 27, 2020 9:58AM ET
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Funny how they called it a bailout of the auto industy in 2009, but now it is not. Liars, crooks, and theives.
Chris Martin
Chris Martin Mar 27, 2020 9:58AM ET
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You talkin' cash for clunkers? (those cars are overseas now), Ford? They took nothing bur got screwed cuz they didn't. The big "O" WANTED the companies beholden to these cover. Freddie, ******? Couple, couple people THERE shoulda gone up the river... GM Maybe but there's my freakin' CTS ???
David Galvin
David Galvin Mar 27, 2020 9:51AM ET
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We are all told to set aside cash for a 'rainy day'. Why are airlines not prepared the same way? Their relentless price gouging and terrible service should not be thanked.
nick bryson
nick bryson Mar 27, 2020 9:51AM ET
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they were prepared. they spent billions buying back their stock. they can easily put those shares on the open market at a discount to generate money to get them through. but they won't of they don't have to
Jonathan Snell
Jonathan Snell Mar 27, 2020 9:43AM ET
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i hope its written so airlines can't hike their prices on us to make up the difference. kind of defeats the purpose of saying they owe tax payers then hike their prices on the tax payers.
Ogün Doğan Özata
Ogün Doğan Özata Mar 27, 2020 9:40AM ET
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bill is going to pass because its much needed right now and whoever delays it will have a bad time in elections!
guido cuenca
guido cuenca Mar 27, 2020 9:11AM ET
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just bull
 
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