U.S. Treasury: Bailouts for smaller airlines won't require collateral
Delta planes sit idle at Kansas City International Airport on April 3 in Kansas City, Missouri. Photo: Jamie Squire/Getty Images
Small to medium airlines receiving bailouts of up to $100 million from the $2.2 trillion coronavirus rescue package will not have to provide the federal government with compensation or equity stakes, the Treasury Department announced Friday evening.
Why it matters: The airline industry got a $58 billion lifeline in the federal aid package, but the sector's operations and prospects will be forever changed by the global pandemic. Approximately 230 air carriers have applied for payroll assistance, the department said.
What they're saying: “The Payroll Assistance Program is critical to providing much-needed relief to Americans who work in the aviation industry,” Treasury Secretary Steven Mnuchin said in a press release.
- “Small and medium-sized passenger aviation businesses are particularly vulnerable to the disruption from COVID 19. This determination will provide significant support to workers and businesses across the country, while also appropriately compensating taxpayers.”
What's next: The department is currently working with 12 passenger air carriers — larger airlines — that are seeking more than $100 million in assistance. Those airlines will need "to secure appropriate financial instruments to compensate taxpayers," Mnuchin said.