American Airlines on Friday decided to take a $5.5 billion loan from the Treasury Dept., money that was made available to all carriers back in March as part of the original CARES Act stimulus package.
American said it has already drawn down $550 million of the Treasury loan, which is backed by its loyalty program but must agree to issue warrants and limit executive pay and stock buybacks, according to CNBC.
All airlines, bound by the same restrictions, have until Sept. 30 to accept the loan portion of the aid that was made available six months ago.
CNBC said that American was originally allocated $4.75 billion, but carriers such as Delta and Southwest declined its loans.
Funds earmarked for other airlines that will not be allocated can be used by other airlines. The industry is hoping for another $25 billion in grants for Payroll Protection from the federal government for another six months until April 2021.
The White House has indicated it is receptive to administering more aid for airlines, but the industry remains in limbo as Congress tries to hammer out a deal.
Democrats in the House of Representatives say they are including more aid for airlines in their version of a second coronavirus stimulus package - but they won't say how much.
House Speaker Nancy Pelosi has also supported giving the airlines a second round of federal grants and loans, much as they did with the CARES Act in March. A Republican proposal earlier this week called for $28 billion in aid.
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