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(Reuters) – Some large U.S. passenger airlines are close to accepting the terms of a $25 billion offer for government coronavirus payroll aid, with announcements possible as early as Tuesday, people briefed on the matter said.
Brent McIntosh, the Treasury undersecretary for international affairs, told Reuters on Monday the agency was not planning to change the terms laid out on Friday, which require 30% of the funds allotted to each airline to be repaid.
The U.S. government would also receive warrants equal to 10% of the loan amount.
“We’ve attempted to come up with an equitable methodology that works for all passenger air carriers, and we don’t want to engage in individual negotiations that would require us to make changes across the carriers,” he said.
Based on wages and benefits in the second and third quarters of 2019, American Airles Group Inc (O:AAL) and United Airlines Holdings Inc (O:UAL) were each eligible for about $6 billion in grants, Delta Air Lines Inc (N:DAL) about $5.6 billion and Southwest Airlines Co (N:LUV) about $4 billion.
However, one airline official said major carriers may receive only about 75% of the payroll assistance sought because the total amount of funds sought exceeded $25 billion.
Earlier, officials told Reuters all of the large U.S. airlines were increasingly resigned to the terms.
Once they accept, the money could arrive soon.
“We intend to get as much money out as quickly as possible, consistent with our obligation to taxpayers to know that it’s going for the right purposes,” McIntosh said.
U.S. passenger airlines, suffering an unprecedented downturn in demand due to the coronavirus, are also eligible for a separate $25 billion loan package under the CARES Act.
They had lobbied for the grant portion to be free cash for employee payrolls to prevent layoffs through Sept. 30, helping to ensure a trained staff is on hand for flights to resume and support an economic rebound once consumer sentiment recovers.
American, United, Delta and Southwest have said they were evaluating the aid terms but had no additional comment.
On Sunday, just 90,510 travelers went through U.S. security checkpoints – another new low – down from nearly 2.5 million a year earlier.
