Treasury Department, major U.S. airlines tentatively agree on $25 billion in federal aid to pay workers and employ them through September.
Treasury Secretary Steven Mnuchin said Tuesday that the nation’s major airlines have tentatively agreed to terms for $25 billion in federal aid to pay workers and keep them employed through September.
The airlines did not want to give up equity, but Treasury demanded compensation for taxpayers. The airlines have little leverage — their business has collapsed as the COVID-19 pandemic reduces air travel to a trickle and they face mass layoffs without the federal aid. “We look forward to working with the airlines to finalize the necessary agreements and disburse funds as quickly as possible,” Mnuchin said in a statement.
In addition, Treasury demanded that to compensate taxpayers, the largest airlines must turn over warrants that, if exercised, could give the government ownership stakes ranging between 1% and 3%, according to calculations by a Raymond James analyst.
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