American Airlines To Get $5.5bn Loan From US Treasury

A File Photo of American Aircraft. Credit: @AmericanAir


American Airlines has agreed to a $5.5 billion loan from the US Treasury as it aims to ride out the downturn caused by the coronavirus, the carrier announced Friday.

The airline, which has said it could lay off as many as 19,000 employees next month without another relief package from Congress, said the financing will “help us shore up our longer-term liquidity until demand returns,” according to a message to employees.

The loan, authorized as part of the massive CARES Act federal relief package passed this spring, adds to American’s mounting debt level, which is higher than that of other leading US carriers.

The Treasury Department told the carrier that the loan could be boosted to as much as $7.5 billion, “although such amount is subject to final approval by the Treasury,” American said in a securities filing.

The CARES Act also provided $25 billion in Payroll Support Program (PSP) funds for US carriers, including $5.8 billion to American.

US airlines that took PSP funds committed to not undertaking any involuntary job cuts through the end of September. American has said it could lay off 19,000 workers starting in October if there is not a new relief package.

Airline CEOs visited the White House on September 17 to lobby for such legislation, but talks in Congress have stalled amid intensifying partisanship ahead of the November presidential election.


Ignatius Igwe

Disqus Comments Loading...

Recent Posts

  • Coronavirus

Nigeria Records 153 New Cases Of COVID-19, 94 Recoveries

  Nigeria on Thursday recorded 153 new cases of the novel coronavirus, according to the Nigeria Centre for Disease Control.…

4 hours ago
  • Sports

Dragic, Adebayo Doubtful For Game Two Of NBA Finals

  Injured Miami Heat stars Goran Dragic and Bam Adebayo were both listed as doubtful Thursday for game two of…

4 hours ago
  • Entertainment

Chrissy Teigen, John Legend Reveal ‘Deep Pain’ Over Losing Baby

  In a post on Instagram, Chrissy called it "the darkest of days". Model Chrissy Teigen and her award-winning singer…

4 hours ago
  • Local

Borno Attack: Zulum Was Warned Against Trip, He Ignored Intelligence – Ex-DSS Boss

  A former Deputy Director of the Department of State Service (DSS), Dennis Amakiri has reacted to the recent attack…

5 hours ago
  • Politics

Nigeria At 60: I Disagree With A Bleak View Of Our History, Says Osinbajo

  As Nigerians, including public commentators, reflect on the country’s journey to nationhood over the past 60 years, Vice President…

5 hours ago
  • Sports

Arsenal Knock Liverpool Out Of League Cup After Penalties

  Arsenal held their nerve to reach the League Cup quarter-finals as Bernd Leno saved two penalties in a 5-4…

5 hours ago