Treasury: Major airlines will take aid to meet payrolls

Treasury Secretary Steven Mnuchin said Tuesday that nation's major airlines have tentatively agreed to terms for $25 billion in federal aid to pay workers and keep m employed through September.

deals aren't final, but assistance is almost certain to be a mix of cash and loans, and government could take a small ownership stake in leing airlines.

airlines did t want to give up equity, but Treasury demanded compensation for taxpayers. airlines have little lever — ir business has collapsed as COVID-19 pandemic reduces air travel to a trickle and y face mass layoffs without federal aid.

nation's six biggest airlines — Delta, American, United, Southwest, Alaska and JetBlue — along with four smaller carriers have told Treasury Department y plan to take part, and discussions are continuing with ors, Mnuchin said.

“We look forward to working with airlines to finalize necessary agreements and disburse funds as quickly as possible,” Mnuchin said in a statement.

airlines h expected to begin receiving aid — entirely in cash that didn't have to be repaid — from government to cover ir payrolls by April 6, deline set by Congress. Inste, y found mselves locked in several days of tense negotiations with Treasury Department, which insisted that only 70% of aid should be in cash, with rest in loans that airlines must repay.

In dition, Treasury demanded that to compensate taxpayers, largest airlines must turn over warrants that, if exercised, could give government ownership stakes ranging between 1% and 3%, according to calculations by a Raymond James analyst.

warrants total 10% of loan amount, and Mnuchin can exercise m at each airline's closing stock price on April 9, according to airline officials.

nation's airlines entered 2020 riding a dece-long hot streak in which toger y earned tens of billions of dollars due to strong travel demand. That success came crashing down in just a few weeks, as governments restricted travel to slow spre of new coronavirus, and people feared contracting illness on a plane.