7 airlines secure Cares Act loans from Treasury

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AA plane Hong Kong
American will borrow up to $5.47 billion from the Treasury Department.

The Treasury Department has closed Cares Act loans with seven U.S. airlines.

The announcement, made Tuesday, comes as the $25 billion federal Cares Act Payroll Support Program for airlines is set to expire at midnight.

Alaska, American, Frontier, JetBlue, Hawaiian, SkyWest and United have each closed loan agreements with Treasury.

American will borrow up to $5.47 billion and Hawaiian can borrow up to $420 million, Treasury and the airlines have reported. The department has yet to publish loan terms for the five other carriers, though SkyWest reported in a regulatory filing that it can borrow up to $573 million. 

Among large U.S. carriers, Southwest and Delta have both said they won't take Cares Act loans and will rely instead on private financing arrangements for the liquidity they need to wade through the Covid-19 crisis. As a result, said Treasury, other airlines will be eligible for a larger portion of the $25 billion loan program than originally planned.

American, for example, had previously expected to have access to a $4.75 billion Treasury loan, instead of the nearly $5.5 billion it closed on last week. 

Airlines and airline industry unions have lobbied loudly for a six-month, $25 billion extension to the Payroll Support Program. Their pleadings have garnered support from both parties and the White House, but the issue is caught up in the broader congressional dispute over a new Covid-19 relief package.

Some carriers, most notably United and American, have said thousands of employees will be furloughed beginning Thursday.

Treasury Secretary Steve Mnuchin called on Tuesday for Congress to extend the Payroll Support Program.

"The payroll support and loan programs created by the Cares Act have saved a large number of aviation industry jobs, and kept workers employed and connected to their healthcare, during an unprecedented time," he said. 

U.S. airlines collectively are losing more than $5 billion per month, according to the trade group Airlines for America.

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