A ground crew member walks past American Airlines planes parked at the gate during the coronavirus disease (COVID-19) outbreak at Ronald Reagan National Airport in Washington, United States, April 5, 2020.
Joshua Roberts | Reuters
The Treasury Department said Tuesday that airlines could get bigger federal loans than previously expected after some airlines opted out, freeing up more funds for the program.
Congress approved $ 25 billion federal loans to U.S. passenger airlines in March to help them cope with the problem Coronavirus pandemicwhich has kept the demand for air travel at around 30% of the previous year’s level.
Despite preliminary agreements Southwest Airlines and Delta Airlines have said they ultimately have no plans to pursue the loans thanks to other sources of funding. For example, Delta said earlier this month it was possible Upsize a debt sale supported by its SkyMiles frequent flyer program from $ 6.5 billion to $ 9 billion.
The airlines have until Wednesday to decide whether to take out the federal loan.
Americans said last week they had secured $ 5.5 billion from the program, more than the $ 4.75 billion they expected. The Fort Worth-based airline expects up to $ 7.5 billion, the maximum for a single airline.
US passenger airlines also received portions of $ 25 billion in payroll from the government, mostly grants. These funds prohibit airlines from shedding jobs until October 1, but in just a few hours the airlines, mostly Americans and United States, plan to shed more than 30,000 jobs.
The airlines and their unions are calling on Congress for an additional $ 25 billion to keep jobs in the sector through March 31.