To avoid bankruptcies and mass redundancies, US airlines are set to benefit from a vast rescue plan. Around ten of them have reached an agreement in principle with the Trump administration for a wage support programme covering 25 billion dollars. " Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, United Airlines, SkyWest Airlines and Southwest Airlines have informed us of their intention to participate in the Payroll Support Program. Conversations are continuing with other airlines regarding their possible participation. "said US Treasury Secretary Steven T. Mnuchin. Mnuchin.
" This law does not solve the long-term problems created by the coronavirus pandemic, but it does allow us to breathe a little easier. I am particularly proud that together we have found a solution where every dollar will go directly to the salaries and benefits of our crew members until 30 September. "wrote Robin Hayes, Managing Director of JetBlue. Under this programme, JetBlue will receive $936 million in aid from the US government, equivalent to 76% of the salaries paid in the second and third quarters of 2019. " The part we don't have to repay covers around 56 % of our wage costs over the six months of last year. The second part will take the form of a low-interest loan and will have to be repaid to the government from October. "said Robin Hayes.
This aid programme also includes certain conditions such as the ban on redundancies and the reduction in employee pay until 30 September 2020. " By which time, it is hoped, demand for air travel will have recovered. The airline has also agreed to limit share buy-backs, dividends and executive remuneration. "said Doug Parker, CEO ofAmerican Airlines. In return, the company will receive a direct subsidy of $4.1 billion and a low-interest loan of $1.7 billion. At the same time, the company plans to apply for a US Treasury loan of around $4.75 billion.
For its part, in addition to direct aid totalling 2.3 billion dollars, Southwest Airlines will benefit from an unsecured term loan of almost one billion dollars. The 10-year, low-interest loan is expected to include approximately 2.6 million warrants issued to the U.S. Treasury Department. The US government would thus become minority shareholder of these airlines.
