Airlines in US ask Treasury to release $58 billion grants and loans

Airlines in US has asked the national Treasury to move quickly to release up to $58 billion in government grants and loans and recommended a formula to divide up the money.

Reuters reported that Airlines in US  wrote in a letter that “given the urgent and immediate need, it is essential that these funds be disbursed as soon as possible.”

Chief executives of American Airlines (AAL.O), Delta Air Lines (DAL.N), United Airlines, Alaska Air Group (ALK.N), JetBlue Airways Corp (JBLU.O), Southwest Airlines Co (LUV.N), Hawaiian Airlines (HA.O) and Atlas Air Worldwide (AAWW.O). and senior executives at UPS Corp (UPS.N) and FedEx (FDX.N) and the head of an airline trade association signed the letter.

The $2.2 trillion stimulus and assistance legislation signed into law Friday by President Donald Trump gives passenger airlines $25 billion in cash assistance to cover payroll costs and $25 billion in loans, while cargo carriers are eligible for $4 billion in grants and $4 billion in loans.

Carriers had threatened to quickly start laying off tens of thousands of workers within days if they did not get a bailout. Treasury faces an April 1 deadline to issue procedures to airlines to apply for grants.

The Carriers said Treasury should allocate grants in accordance with salaries and benefits paid by carriers from April 1 through Sept. 30, 2019 and filed with the U.S. Transportation Department.

The letter suggested the loans be divided by each passenger carrier’s pro rata share of “system available seat miles” for 2019 operations. For cargo carriers it said the loans should be divided by “revenue ton miles” for 2019 operations.

Treasury did not respond Sunday to a request for comment on the letter.

The  letter said executives looked forward to meeting with Treasury “to discuss the specific terms” but wanted to “make clear that we are speaking with one voice when we propose these formula allocations.”

According to 2019 stock market filings for the top publicly-traded U.S. carriers, American Airlines paid the most in salaries and benefits at about $6.4 billion over a six-month period.