The US Department of the Treasury granted airlines an additional $9.5 billion Saturday for payroll during the COVID-19 crisis. The Treasury has disbursed a total of $12.4 billion in aid to airlines for economic relief associated with COVID-19 loses.
The Department of the Treasury announced the disbursements on Saturday:
Since announcing the first Payroll Support Program payments to passenger air carriers on April 20, Treasury has disbursed an additional $9.5 billion in initial payments to approved applicants, including an additional 8 major airlines and 29 smaller passenger air carriers. To date, Treasury has made $12.4 billion in initial payments to 93 air carriers and will continue to make additional payments on a rolling basis. All funds provided under the Payroll Support Program can only be used for employee wages, salaries, and benefits. Treasury is also announcing certain details of the Payroll Support Program for cargo air carriers and contractors. In consultation with the Secretary of Transportation, Secretary Steven T. Mnuchin determined that cargo air carriers that receive $50 million or less of payroll support and contractors that receive $37.5 million or less of payroll support will not be required to provide financial instruments as appropriate compensation for the financial assistance. The majority of cargo air carriers and contractors seek less than $10 million.
The CARES Act, a COVID-19 relief package signed into law on March 27th, provides the airline industry with the disbursements. The CARES Act reserves $25 billion for passenger air carries, $4 billion for cargo air carriers, and $3 billion for air contractors.
The COVID-19 pandemic has heavily affected airlines as governments have restricted international and domestic travel. Though airlines welcome the Treasury’s disbursements, the relief may not be adequate. In March, Airlines for America requested nearly $60 billion in direct assistance and loans guaranties for the airline industry. The CARES Act only grants about half of this requested amount.