Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  News  >  Companies  >  All News

News : Companies
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors

U.S. airlines must suggest possible compensation for cash grants: Treasury

share with twitter share with LinkedIn share with facebook
share via e-mail
03/31/2020 | 12:24am EDT
Planes are seen parked at gates at San Francisco International Airport

Airlines must suggest possible compensation in return for government cash assistance and agree to conditions that include not cutting pay or laying off employees through Sept. 30, the U.S. Treasury Department said in guidelines issued on Monday as it prepares to quickly hand out $25 billion.

Congress approved legislation last week authorizing the $25 billion for passenger airlines, as well as $4 billion for cargo carriers and $3 billion in cash for airport contractors like caterers and airplane cleaners.

Under the law, Treasury is supposed to make initial payments of the grants designed to cover payroll costs by next week.

The companies "must identify financial instruments" that would "provide appropriate compensation," the guidelines said, adding that these could include warrants, options, preferred stock, debt securities or notes.

The department told applicants to apply by April 3 at 5 p.m. to receive funds as soon as possible. Applications received after April 27 may not be considered.

Other conditions for the cash assistance include limits on executive compensation through March 2022 and no stock buybacks or dividend payments through September 2021.

Airlines may also apply for a separate $29 billion in government loans. Separate Treasury guidelines released Monday for loans said carriers must provide financial instruments "for the benefit of taxpayers, in equity appreciation or a reasonable interest rate premium." Companies critical to U.S. national security can seek loans from a separate $17 billion fund.

Those seeking loans must describe losses they have "incurred or will incur as a result of coronavirus" and detail the cause of the loss such as reduced demand, unavailability of credit or unbudgeted medical expenses.

The Treasury Department said in reviewing applications for the cash assistance it will consider the "adequacy of the proposed financial instruments for providing compensation to the Federal Government."

It also said it "may refuse to provide payroll support payments to applicants that have taken, or are currently evaluating, any action to commence a bankruptcy."

Major U.S. airlines on Saturday asked the Treasury department to move quickly to release funds. They have cut tens of thousands of flights as travel demand collapses amid the coronavirus pandemic and warned that without cash they would need to quickly begin massive furloughs.

The chief executives of American Airlines, Delta Air Lines, United Airlines, Southwest Airlines Co and others wrote in a letter that "given the urgent and immediate need, it is essential that these funds be disbursed as soon as possible."

Treasury Secretary Steven Mnuchin said Friday taxpayers will be "compensated" for providing emergency assistance to air carriers.

American Airlines said Monday it will be allocated about $12 billion of the combined cash assistance and government loans. It has said it expects that Treasury will not seek "onerous" conditions.

By David Shepardson and Tracy Rucinski

Stocks mentioned in the article
ChangeLast1st jan.
AMERICAN AIRLINES GROUP INC. 11.18% 18.59 Delayed Quote.-41.64%
UNITED AIRLINES HOLDINGS, INC. 8.45% 42.405 Delayed Quote.-55.61%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news "Companies"
05:31pNORTHROP GRUMMAN : Awarded NASA Contract to Provide First Crew Module for Artemis Program Gateway
05:31pCOVID-19 Impact and Recovery Analysis | Plastic Resins Procurement Intelligence Report Forecasts Spend Growth of over USD 156 Billion | SpendEdge
05:31pWeissLaw LLP Reminds WMGI, QES, and TERP Shareholders About Its Ongoing Investigations
05:28pTech drives Nasdaq to all-time high as signs of recovery emerge from coronavirus pandemic
05:26p1ST SOURCE CORP : Change in Directors or Principal Officers, Financial Statements and Exhibits (form 8-K)
05:26pGLAUKOS CORP : Submission of Matters to a Vote of Security Holders (form 8-K)
05:26pNEW YORK COMMUNITY BANCORP INC : Submission of Matters to a Vote of Security Holders (form 8-K)
05:26pSPAR GROUP INC : Other Events (form 8-K)
05:25pWeissLaw LLP Reminds QUMU, TCO, PTLA, and WLTW Shareholders About Its Ongoing Investigations
05:25pOculus Completes Acquisition of California-Based Data Privacy Provider, OCL Technologies Corp.
Latest news "Companies"