By Alison Sider and Kate Davidson 

The U.S. Treasury Department finalized terms of loans to five major airlines as part of an aid program to help the industry weather the coronavirus pandemic.

The Treasury said that American Airlines Group Inc., Frontier Airlines, Hawaiian Airlines, SkyWest Airlines and Spirit Airlines Inc. had agreed to loan terms and signed letters of intent.

Air travel fell sharply this spring as government restrictions on travel and fears of infection kept passengers from flying. While air travel has started to rise, demand remains a fraction of what it was a year ago and airline executives have said they expect a full recovery will likely take years.

These are the first airlines to accept government loans from a $25 billion pool Congress earmarked under the Cares Act, the $2.2 trillion economic stimulus package passed in March. Major carriers have also received another $25 billion in federal aid to pay workers through the end of September to avoid mass layoffs they said would have been inevitable otherwise.

The Treasury didn't detail the amounts of the loans or the terms, but said the borrowers would have to provide warrants, equity stakes, or senior debt instruments. The Treasury said it is continuing discussions with other carriers that are eligible for loans.

American Airlines has previously said it would be eligible for loans of as much as $4.75 billion, and that it was seeking to pledge its frequent flier program as collateral.

Write to Alison Sider at alison.sider@wsj.com and Kate Davidson at kate.davidson@wsj.com

 

(END) Dow Jones Newswires

July 02, 2020 09:39 ET (13:39 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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