Five U.S. airlines have finalized deals with the Department of Transportation to take loans from the federal government as part of the CARES Act stimulus package.
The package was passed in March and $25 billion in loans were made available to help the airlines deal with the devastating impact of the coronavirus.
American Airlines, Hawaiian, Sky West, Spirit and Frontier will all be receiving their respective portions, according to CNBC.
Other airlines have applied for the funds and said they expect to be eligible for billions in federal loans, but have not yet signed their letters of intent to borrow the money, CNBC said. The Treasury Dept. did not disclose the terms nor amounts of the loans to the carriers.
Airlines earlier took grant money from the government to help meet payroll needs through Sept. 30 of this year, but the loan portion must be paid back and recipients were required to put up equity, warrants, or senior debt to compensate taxpayers.
That said, American Airlines CEO Doug Parker told staff that the airline expects to finalize a $4.75 billion loan in the third quarter. Last month he told shareholders that the carrier plans to use cash flows from its AAdvantage frequent flyer credit card as collateral.
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