Treasury Proposes $50 Billion Airline Loan in Stimulus Plan
The Treasury Department will propose lending airlines $50 billion in its coronavirus stimulus plan, rejecting the industry’s request for nearly $30 billion in grants, according to a document obtained by Bloomberg News.
The agency will use its exchange stabilization fund to provide $50 billion for secured lending to U.S. passenger and cargo airlines, the document says.
The program would help an industry being crushed by shriveling travel demand and deepening investor pessimism. A Standard & Poor’s airlines index was down about 19% Wednesday, pushing the year-to-date decline to more than 50%.
Treasury also proposed to lawmakers that the stimulus provide $150 billion to “severely distressed sectors” of the economy from the virus outbreak.
The White House’s plan follows a proposal this week from lobbying group Airlines for America, which unveiled a request for $50 billion in aid for U.S. passenger carriers. Airlines for America also wanted $8 billion for air cargo companies. But while the industry was seeking a mix of grants, tax relief and loans, the White House plan envisions secured loans.
The airline industry had sought a total of $29 billion in grants to make up for losses, $25 billion for passenger carriers and the remainder for cargo haulers, according to a press release Monday from Airlines for America. The trade group also asked for another $29 billion pool of funds for loans to the industry, $25 billion for passenger airlines and $4 billion for the cargo sector.
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