US Treasury Department Reaches Loan Agreements With 5 Major Airlines

(RTTNews) - The U.S. Department of the Treasury Thursday announced that 5 major US airlines, including American Airlines, Frontier Airlines, Hawaiian Airlines, Sky West Airlines, and Spirit Airlines, have agreed to the terms on which Treasury would extend loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

"We are pleased that major air carriers intend to use this important program and for Treasury to use its authority under the CARES Act to provide much-needed financial assistance, while ensuring appropriate taxpayer compensation," said Secretary Steven Mnuchin. "Conversations with other airlines continue, and we look forward to finalizing agreements as soon as possible."

The CARES Act authorizes the Department of the Treasury to make loans to eligible businesses related to losses incurred as a result of the coronavirus pandemic.

It requires borrowers to provide warrants, equity interests, or senior debt instruments as appropriate taxpayer compensation.

Participating borrowers must also commit to certain requirements under the CARES Act to maintain employment levels and limit employee compensation, dividends, and share repurchases.