US airlines have received $12 bln in aid so far amid coronavirus crisis: Treasury
The Trump administration said Saturday that it has disbursed $12.4 billion to 93 air carriers to help them preserve jobs as the sector struggles to survive the effects of the COVID-19 pandemic.
In a statement, the Treasury Department said it would “continue to make additional payments on a rolling basis.”
The aviation sector has been struck with devastating force by the pandemic, which is keeping travelers at home, forcing airlines around the world to cancel thousands of flights.
Cargo air carriers are also suffering.
The Treasury statement added that those carriers that “receive $50 million or less of payroll support and contractors that receive $37.5 million or less of payroll support will not be required to provide financial instruments” in exchange for the aid.
The Trump administration and the largest US air companies had reached agreement in principle in mid-April on a plan aimed at helping them avoid bankruptcies and massive layoffs in an industry that employs more than 750,000 people in the United States.
While the Treasury has not revealed the terms of the agreement, knowledgeable sources said it calls for the federal government - in exchange for its financial aid - to receive “warrants,” financial products that can be converted into shares. That would potentially make the state a minority shareholder in dozens of participating air companies.
The Treasury is responsible for allocating the $2.2 trillion in emergency aid agreed on by Congress and signed by the president in late March.
But the administration hopes to avoid any suggestion of favoritism or of doling out billions without accountability.
The administration thus announced on Thursday a tightening of conditions for aid to small- and medium-sized businesses to prevent larger groups - with greater political clout - from unfairly benefiting, as happened with a first tranche of $349 billion.