U.S. Treasury Disburses $2.9B In CARES Act Airline Aid
WASHINGTON—The U.S. Treasury Department has disbursed an initial round of financial aid to passenger airlines worth $2.9 billion, as a deal was finalized with six large carriers over terms related to payroll assistance under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Roughly 55% ($1.62 billion) of the funds went to Southwest Airlines, the Dallas-based carrier reported in an April 21 securities filing. The remainder was divided between one other major airline and 54 smaller carriers, although the Treasury did not identify any recipients by name.
The six large airlines that have agreed to final terms are Allegiant Air, American Airlines, Delta Air Lines, Southwest Airlines, Spirit Airlines and United Airlines.
The Treasury expects to wrap up further agreements with five more airlines soon: Alaska Airlines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways and SkyWest Airlines.
More rounds of payments will be disbursed to approved carriers on a rolling basis.
“Treasury has received hundreds of applications for the Payroll Support Program from passenger air carriers, cargo air carriers and contractors, and is working to review and approve applications as quickly as possible,” the department said in a statement.
American Airlines will receive the most payroll support among all carriers, worth about $5.8 billion total, followed by $5.4 billion for Delta, $5 billion for United, $3.1 billion for Southwest, $992 million for Alaska, $936 million for JetBlue, $334 million for Spirit, $290 million for Hawaiian and $172 million for Allegiant.
The $25 billion payroll support program is separate from a $25 billion tranche of loans and loan guarantees included in the CARES Act, for which several large carriers including American and United have already applied.
Phoenix-based regional carrier Mesa Airlines separately said it will receive $93 million in payroll support from the Treasury, none of which will have to be repaid because the total amount is under $100 million.
“This aid may well serve as the bridge that allows the industry to survive and give us the means to continue to provide the safest mass transportation system in history,” Mesa Group chairman and CEO Jonathan Ornstein said in a statement.
The first injection of funds arrived as passenger volumes at U.S. airports plummeted 97% from a year ago for the week ended April 12, according to data from Airlines for America (A4A). The group reported 2,820 aircraft from U.S. passenger airlines are parked across the country as of April 19, more than double the 1,186 idled planes counted on March 31.