US Treasury releases first payroll support payments to major American airlines

The US Department of Treasury on Saturday made its first stimulus payments to passenger airlines, disbursing a total of $6.1 billion to major carriers to support thousands of jobs at risk of disappearing due to COVID-induced economic hardships. The payments are part of a broader stimulus package of up to $16 billion to support American workers employed by major airline carriers. Treasury Secretary Steven Mnuchin also announced the department has approved more than $12 billion in payroll support for American airline companies. 

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32,000 workers to benefit 

"The Payroll Support Program provided critical support to the aviation industry and its workers. The extension of this program will provide additional economic relief for workers, while also protecting taxpayer funds," Treasury Secretary Steven Mnuchin said in a statement on Saturday. The payroll support will allow more than 32,000 workers in the aviation industry to return to their jobs by March. The government plans to release the remaining stimulus funds by end of March. 

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US Treasury Department has entered preferred stock purchase agreements with Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, Republic Airways, SkyWest Airlines, Southwest Airlines, Spirit Airlines, and United Airlines. These airlines employ nearly 95% of the US airline capacity. 

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Delta Air Lines, which the largest passenger carrier in the US, on Thursday reported $12.4 billion in losses for all of 2020. The company said it was the largest annual loss incurred by the airline since the 1920s. Delta received its first payment from the Treasury Department on Friday. Delta and other airlines suffered major losses in 2020 largely due to the rapid decline in passenger footfall caused by COVID-19 lockdowns. The numbers looked better in December because of the removal of restrictions and the surge ahead of the New Year celebration, air travel was still 60% down compared to the same time in 2019. 

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