Coronavirus: US to take stakes in airlines in exchange for aid

American Airlines jets sit idly at their gates on Wednesday, March 25, 2020, at Sky Harbor International Airport in Phoenix. Airlines in the US are starting to idle planes due to a sharp drop in bookings caused by coronavirus outbreak. (AP)

The US government plans to take stakes in major airlines in exchange for aid included in a $2 trillion coronavirus economic rescue package, the Wall Street Journal reported on Thursday.

Treasury Secretary Steven Mnuchin indicated the plan for government stakes in conversations with lawmakers, said the report, which cited unnamed officials.

The newspaper said the precise terms of the arrangement were not yet clear, but one option is that the government could receive a warrant that allows it to buy shares at a certain price.

A source familiar with the negotiations told AFP there was no requirement that the government take an equity stake in the carriers, but the intention is for it to receive some form of compensation.

The bill that passed the Senate includes $25 billion in loans to US airlines and another $25 billion in grants. Major US carriers including United Airlines and Delta Air Lines did not immediately respond to a request for comment.

The novel coronavirus pandemic has left the worldwide airline industry in dire straits as governments bar significant air travel to try to limit the spread of the virus.

Last Update: Thursday, 26 March 2020 KSA 20:48 - GMT 17:48