13 September 2020

Airlines seek changes to U.S. proposal to make some grant money repayable (NASDAQ:AAL)

Major U.S. airlines are urging Treasury officials to scrap or revise a proposal that would make part of the $25B earmarked by Congress to help keep workers on the payroll repayable in the form of low-cost loans.

Treasury Secretary Mnuchin told the airlines on Friday the government would require them to repay 30% of the grants in low-cost loans over 10 years – with the first five years at 1% interest – before the interest rate would rise.

Trade group Airlines for America – which represents American (NASDAQ:AAL), United (NASDAQ:UAL), Delta (NYSE:DAL), Southwest (NYSE:LUV), JetBlue (NASDAQ:JBLU), Alaska Airlines (NYSE:ALK) and others – said today it believes the $25B in payroll assistance was “to be only in grants – which is considerably more effective for our employees – and not a combination of grants and loans.”

The head of the Association of Flight Attendants union wrote on Twitter today that if Treasury insists on airlines repaying $7B in grants, “job cuts will happen now AND longer term cuts will come in October. This is absolutely stealing from the money Congress allocated directly to workers.”

ETF: JETS

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