Amid a plunge in demand for air travel, several airlines announced on Tuesday that they reached agreements with the Treasury Department for billions in government grants to help mitigate the impact of virus-prevention measures.
Measures to slow the spread of COVID-19 have included urging consumers to stay home, grounding planes, and asking employees to take voluntary unpaid leave. Airlines -- including American, Delta, United, Southwest, Spirit, JetBlue, Alaska -- applied to receive a cut of $25 billion in payroll grants established under the CARES Act in an effort to keep pilots, flight attendants, and other airline employees on payrolls through September.
In a statement, Treasury Secretary Steven Mnuchin announced that several carriers would be receiving federal assistance from the Payroll Support Program.
“We welcome the news that a number of major airlines intend to participate in the Payroll Support Program,” he said. “This is an important CARES Act program that will support American workers and help preserve the strategic importance of the airline industry while allowing for appropriate compensation to the taxpayers.”
Airlines receiving aid
Officials from American Airlines said this week that the Treasury Department approved $5.8 billion in assistance.
“By accepting these funds, we have happily agreed to not involuntarily furlough or reduce the hourly pay rates of our U.S.-based team members through Sept. 30, at which point we hope and expect that Americans are regularly flying again,” American’s CEO, Doug Parker, and the airline’s president, Robert Isom, wrote in a memo to employees.
Southwest said it expects to receive $3.2 billion under the program, more than $2.3 billion in payroll support, and a 10-year low-interest loan of nearly $1 billion. Delta said its deal with the Treasury Department will yield a $5.4 billion loan, which will include a 10-year, $1.6 billion, unsecured-loan. JetBlue said it will get $935.8 million. Of that figure, close to $251 million will come in the form of a loan.
“We welcome the news that a number of major airlines intend to participate in the Payroll Support Program,” the Treasury Department said in a statement. “This is an important CARES Act program that will support American workers and help preserve the strategic importance of the airline industry while allowing for appropriate compensation to the taxpayers.”
Sara Nelson, president of the Association of Flight Attendants, called the coronavirus relief deal “unprecedented.”
“This is an unprecedented accomplishment—a truly workers-first stimulus that keeps people connected to their jobs and provides stability and hope to millions of aviation workers and sets a template we must now work to extend to every worker,” she said.
Mnuchin said the Department will work to “finalize the necessary agreements and disburse funds as quickly as possible.”