The US Department of the Treasury has announced that a further five major airlines - Delta Air Lines, United Airlines, Southwest Airlines, Alaska Airlines, and JetBlue Airways - have signed Letters of Intent regarding federal loans under the CARES Act.
Taking into account that five other airlines signed similar memoranda earlier, the Treasury has now agreed on loans with nine out of America's ten largest airlines operating under their own codes (the sole exception being Allegiant Air (G4, Las Vegas Harry Reid)), as well as with the largest regional capacity provider SkyWest Airlines (OO, St. George Municipal).
As with the previous batch of LOIs, the Treasury did not disclose the amounts agreed on either with individual carriers or collectively with the whole lot.
"Treasury’s authority under the CARES Act to provide up to USD25 billion in liquidity to passenger air carriers and related businesses will help preserve America’s aviation industry while also protecting taxpayers. We look forward to working with the airlines to finalize agreements and provide the airlines the ability to access these loans if they so choose," Secretary of the Treasury Steven Mnuchin said.
Under the terms of the CARES Act, which outlines measures to support businesses affected by the COVID-19 pandemic, loans, if taken by the airlines, would come with numerous strings attached including the obligation to provide warrants, equity interests, or senior debt instruments, as well as limits on dividends and share repurchases.
