U.S. Treasury agrees on loan terms with American, four other airlines

July 2, 2020

WASHINGTON (Reuters) – The U.S. Treasury said Thursday it has agreed on terms for government loans with five U.S. carriers, including American Airlines Group Inc <AAL.O>.

The Treasury said it had signed letters of intent with American, Frontier Airlines, Hawaiian Airlines <HA.O>, SkyWest Airlines <SKYW.O>, and Spirit Airlines <SAVE.N> under a $25 billion emergency loan program created by Congress in March.

American said in April it expected to apply for a loan from the U.S. Treasury of approximately $4.75 billion on top of $5.8 billion in payroll assistance.

Treasury separately awarded airlines $25 billion in payroll assistance with most of the aid in the form of grants that does not need to be repaid.

Treasury Secretary Steven Mnuchin said in a statement that “conversations with other airlines continue, and we look forward to finalizing agreements as soon as possible.” Airlines have until September 30 to close on the loans.

(Reporting by David Shepardson; Editing by Chizu Nomiyama)