Five more large U.S. carriers have preliminarily agreed on
terms for accepting Cares Act loans from the federal government.
Delta, United, Southwest, JetBlue and Alaska have each
signed letters of intent with the Treasury Department, said Treasury Secretary
They join American, Frontier, Spirit, Hawaiian and Sky West,
which signed letters of intent last week.
In total, the Cares Act authorizes the Treasury Department
to disburse $25 billion in loans to U.S. carriers. In exchange for the loans,
the government has the option to take small ownership stakes in the airlines.
This tranche of loans is separate from the $25 billion in
combined grants and loans that Treasury has already awarded to airlines. Under
that first tranche of Cares Act funding, major carriers received 70% of the
money as grants and 30% as low-interest loans. For the grant portion, Treasury
had the right to buy equity at a set price equal to approximately 10% of the
value of the loan.
U.S. airlines are continuing to bleed money, with demand off
more than 75% from last year. United said Wednesday that it is still losing $40
million per day.