The U.S. Treasury has finalized loans to seven airlines and called on Congress to authorize additional funding for the industry to prevent massive job cuts.
In a statement on Tuesday, the department announced loans for American Airlines Group (AAL +4.49%), United Airlines Holdings (UAL +6.80%), Alaska Air Group (ALK +5.19%), JetBlue Airways (JBLU +4.13%), Hawaiian Holdings (HA +0.00%), SkyWest (SKYW +5.53%), and Frontier Airlines. The loans were part of a $25 billion package authorized earlier this year under the CARES Act.
Individual amounts were not disclosed, but American said last week it had finalized a $5.5 billion loan and could raise it to $7.5 billion if the money is not allocated elsewhere. Other airlines, including Southwest Airlines (LUV +4.51%) and Delta Air Lines (DAL +3.50%), have said they do not intend to borrow under the plan.
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The stimulus bill also provided $25 billion in payroll protection to help the industry avoid layoffs, and with prohibitions on involuntary separations set to expire today, airlines and their unions are lobbying for additional funds.
In announcing the loans, Treasury Secretary Steven Mnuchin urged Congress to approve a new stimulus plan with additional payroll support for the industry.
"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," Mnuchin said.
Airlines have seen travel demand evaporate due to the pandemic, and without aid from Washington will need to get dramatically smaller in the months to come. House Democrats have also voiced support for additional airline aid, but it is uncertain lawmakers will be able to agree on a broader stimulus package before the election.
Thanks in part to the government loans, the airlines have the liquidity to navigate the crisis for now. The added stimulus is not needed to avoid bankruptcies, but as Mnuchin notes, it will likely be the difference between workers keeping their jobs and benefits or filing for unemployment.
