Treasury Department Offers Loans to Multiple Airlines

The U.S. Treasury Department on Tuesday announced it has offered loans to seven major U.S. airlines to help defray expenses to an industry devastated by the coronavirus pandemic.

The loans are separate from any aid that might or might not be included in a second stimulus package that would feature an extension of the Payroll Support Program. Congress has yet to come to an agreement on that.

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According to the Washington, D.C.-based publication The Hill, the seven airlines on Tuesday, include Alaska, American, Frontier, JetBlue, Hawaiian, SkyWest and United.

Delta and Southwest declined to take the loans; the other seven have until today, Wednesday, Sept. 30, to accept the loan agreement from Treasury.

“The payroll support and loan programs created by the CARES Act have saved a large number of aviation industry jobs, and kept workers employed and connected to their healthcare, during an unprecedented time,” Treasury Secretary Steven Mnuchin said in a statement. “We are pleased to conclude loans that will support this critical industry while ensuring appropriate taxpayer compensation.”

Mnuchin is in favor of extending the PSP and called on Congress to act. Under the terms of the original stimulus package in March, airlines were prohibited from firing or laying off any employees until Oct. 1.

“We call on Congress to extend the Payroll Support Program so we can continue to support aviation industry workers as our economy reopens and we continue on the path to recovery,” Mnuchin said.

The House Democrats’ $2.2 trillion coronavirus relief package includes $25 billion to hold off the furloughs and layoffs.

The Hill noted that the original CARES Act requires loan borrowers to provide appropriate taxpayer compensation and borrowers must commit to requirements regarding the maintenance of employment levels and limiting employee compensation, dividends and share repurchases.