The US Treasury and airlines have reached an agreement on the terms of their bailout to avoid bankruptcy and avoid layoffs in a sector that directly employs more than 750,000 people in the United States, announced on Tuesday the Ministry.
Read also: Coronavirus: airlines call for help
This agreement was signed with a dozen airlines, including the big four - American Airlines, Delta Air Lines, United Airlines and Southwest - who were hesitant to accept government aid for fear of draconian compensation. The historic $ 2.2 trillion economic recovery plan, promulgated in late March by President Donald Trump, provides $ 25 billion in subsidies to airlines to keep jobs.
The Treasury informed the airlines last Friday that they had to repay 30% of the money they should receive in the future, according to sources familiar with the matter. The federal government should also receive in exchange for its aid "warrants", which are financial products that can be converted into shares. These "warrants", the price of which is generally fixed in advance, should represent 10% of the value of the aid which each company will receive.
The State, minority shareholder of the signatory airlines
The Treasury believes that the agreement "will help support American workers and preserve the strategic importance of the airline industry while providing appropriate compensation to taxpayers". The ministry, however, did not disclose the terms of the agreement, but according to close sources, the state should become a minority shareholder of the signatory airlines.
American Airlines, United and Southwest have welcomed the deal, which will allow them "to cover part of the pay and benefits" of employees until September 30.
In addition to this $ 25 billion, airlines can also claim loans guaranteed up to $ 25 billion to revive their activity, after weeks of falling air traffic, suspension of transatlantic flights, postponement of orders and deliveries of new aircraft and the cancellation of thousands of flights.
