Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

U.S. Treasury starts distributing $15 billion in payroll aid to airlines

Stock MarketsJan 15, 2021 09:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Delta Airlines planes are loaded and unloaded at Salt Lake City International Airport in Salt Lake City 2/2

By David Shepardson

WASHINGTON (Reuters) - The U.S. Treasury Department on Friday began distributing $15 billion in new payroll assistance to airlines, money allocated by Congress to help more than 32,000 aviation workers return to jobs through at least March 31.

Large airlines receiving assistance must repay 30% of it to the government in 10-year, low-interest loans. They must also issue warrants to the government as part of the assistance and must agree to extend restrictions on executive compensation and a ban on paying dividends and share repurchases through March 2022.

The Treasury said Friday it was initially awarding more than $12 billion in payroll support for major passenger air carriers and had released $6.1 billion on Friday.

Treasury and airline officials said the government plans to release the remaining payroll assistance by the end of March.

Delta Air Lines (NYSE:DAL) said it expects to receive $2.9 billion in total aid this round, with $830 million in the form of an unsecured loan. The airline said it received the first installment of $1.4 billion on Friday.

Southwest Airlines (NYSE:LUV) said it expected to receive $1.73 billion in total and received $863.7 million on Friday.

The warrants are priced at each airline's share closing prices on Dec. 24.

Congress in March approved a initial $25 billion in payroll assistance to support airline jobs for six months.

Treasury said Friday it struck agreements with 12 airlines representing nearly 95% of U.S. airline capacity including Alaska Airlines, Allegiant Air, American Airlines (NASDAQ:AAL), Delta, Frontier Airlines Co, Hawaiian Airlines, JetBlue Airways (NASDAQ:JBLU), Republic Airways, SkyWest (NASDAQ:SKYW) Airlines , Southwest, Spirit Airlines (NYSE:SAVE), and United Airlines.

Treasury Secretary Steven Mnuchin said the program "will provide additional economic relief for workers, while also protecting taxpayer funds."

SkyWest said it will receive $233 million in total under the program and received half on Friday.

Last month, American Airlines and United Airlines announced they were recalling tens of thousands of furloughed employees.

American and United together furloughed more than 32,000 workers in October. The new assistance will keep those workers on payrolls through March 31.

Neither airline on Friday immediately disclosed how much they expected to receive from Treasury.

 

U.S. Treasury starts distributing $15 billion in payroll aid to airlines
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Alan Rice
Alan Rice Jan 17, 2021 1:44PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
A last meal for the dinosaurs ??
Alawi AlAlawi
AlAlawiAlawi Jan 17, 2021 2:52AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
$AAL BOUEY TAH FLYING DEB! Bailout in the Kitchen!
Will Le
Will Le Jan 15, 2021 10:04PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Since the airlines are getting a nice bailout, I wonder if they are still going to charge outrageous prices for flights and still charge for baggage.
Rig Rigr
Rig Rigr Jan 15, 2021 10:04PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They always get bailouts and they always f us over on flight costs.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email