On Saturday, April 25, the U.S. Treasury Department has released a US$9.5 billion [AU$14.6 billion] supplementary budget from the Payroll Protection Program (PPP) to distribute to all U.S. airlines, citing that the sector may need more due to massive dive in air travel demand.
The extra funds brought the total budget for the airline sector to $12.4 billion, according to the U.S. Treasury. As of this writing, the government has spent grants to 83 smaller carriers and ten large airlines.
According to Reuters, the Congress endorsed $25 billion in grants assigned to passenger air carriers as payroll assistance. The $19.2 billion budget will be given to America’s largest airlines, namely:
The Treasury, on the one hand, requires all major airlines to comply with all its conditions. Among them are carriers should pay its staff in full and must not dismiss any employees until September 30.
The said companies are banned from paying dividends or purchasing stock back as well. They also face restrictions on executive compensation.
The U.S. Treasury also granted airlines to receive more than $100 million in assistance, with a 30% payback in low interest for over ten years. The department will also award 50% of the fund at first and will release the remaining half in July.
The chief executive of SkyWest Inc., Russel “Chip” Childs shared that the airline company’s future seems uncertain. Childs said in his email to Reuters:
“There is a very high possibility that our airline could be a smaller airline firm by the end of the year.”
SkyWest will also receive a total of $438 million in payroll assistance.
Reportedly, the U.S. Treasury Department is still reviewing how to give $3 billion in grants to airport contractors such as caterers and $4 billion to cargo carriers.
According to the department, cargo carriers that collected $50 million or less of payroll aid are “not required to give financial instruments as fitting compensation” for support. The same condition goes to airport contractors as well, which received $37.5 million or less.
The department also released the application form for companies on Saturday, which is considered essential to maintaining national security.
Additional funds will also be provided continuously to approved applicants on a rolling basis.
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