Five other US airlines strike deal for federal virus aid loans | Aviation
United Airlines also warned employees on Tuesday that the peak in COVID-19 infections was hitting reservations.
The largest U.S. air carriers have now all signed letters of intent with the U.S. Department of the Treasury, paving the way for federal loans to help them overcome the novel coronavirus.
United Airlines, Alaska Airlines, Delta Air Lines, JetBlue Airways and Southwest Airlines were among the list of carriers whose Treasury said on Tuesday they had signed letters regarding loan terms, which would include the issuance of warrants and restrictions on the loan. executive compensation and the purchase of shares. -backs.
“We look forward to working with the airlines to finalize deals and give them the ability to access these loans if they wish,” Treasury Secretary Steven Mnuchin said in a statement.
Last week, the Treasury said it had agreed on terms for government loans under the Aid, relief and economic security against coronaviruses (CARES) Act, along with five other airlines, including American Airlines.
Airlines have already received $ 25 billion in wage assistance under the CARES Act to protect hundreds of thousands of jobs through September, and are eligible for another $ 25 billion loan program.
U.S. unions representing aviation workers have separately called on lawmakers to extend the payroll assistance program until March, as Congress considers a new round of spending to fix problems and jobs related to coronavirus.
We look forward to working with airlines to finalize deals and allow airlines to access these loans if they wish.
U.S. carriers, suffering from the industry’s worst crisis as the coronavirus pandemic crushes demand, have until September 30 to decide whether or not to accept the loan. They can take time off or cut jobs from October 1.
Travel has resumed in some areas over the past two months as economies open and travel restrictions relax, although a recent spike in COVID-19 cases in some US states has triggered more restrictions and began to weigh on reservations again.
United Airlines warned its employees at a virtual town hall on Tuesday that the spike in infections was already hitting bookings.
UnitedTravel bookings in the coming month quickly began to decline after states of New York, New Jersey and Connecticut said they would require people arriving from hotspot states to be quarantined for 14 days a person familiar with the matter told Reuters. Press Agency.
The collapse was most pronounced in UnitedThe Newark hub, where short-term net bookings were just 16% of levels a year ago on July 1.
United told employees to prepare to receive notifications of potential leave under the Worker Adjustment and Retraining Notifications Act (WARN) as early as this week, according to an internal memo reviewed by Reuters.
Raymond James analyst Savanthi Syth said in a note to investors that the bookings trend is likely much wider than that of the New York area, noting that at least 14 states are requiring outside visitors state to submit to a 14-day quarantine.
Delta, which launches second-quarter airline results on July 14, said last week it could cut the number of flights it planned to add in August due to the surge in COVID cases. 19.
U.S. airlines have already drastically cut flight capacity and rushed to consolidate capital while encouraging employees to accept early departure packages to avoid forced cuts.