Treasury Rolls Out Airline Aid Strategy, Urging Carriers to Act Quickly
WASHINGTON – The Treasury Department provided some guidance Monday night on how it will award grants and loans to airlines affected by the coronavirus outbreak, urging them to apply for “payroll support” by Friday.
The department said the resources it was making available online are intended to assist eligible businesses in applying for payroll support to enable the continued payment of employee wages, salaries, and benefits, and for loans pursuant to the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The relief package includes $25 billion in grants, along with $25 billion in loans and loan guarantees for passenger airlines, $4 billion for cargo carriers and $17 billion for other firms critical to maintaining national security.
The Treasury guidance said passenger and cargo airline companies should submit their requests for grants to cover payroll expenses no later than 5 p.m. on April 3, or risk processing delays, and applications submitted after 11:59 p.m. on April 27 may not be approved at all.
Payroll-support grants will be based on an airline’s total salaries and benefits paid to employees from April 1 through Sept. 30, and are contingent on the companies refraining from involuntary layoffs, furloughs or salary reductions during that time period, the department said.
Companies must also identify in their applications any financial instruments, such as warrants or equity, and proposed terms “to provide appropriate compensation for the government,” the guidance said.
The law authorized Treasury Secretary Steven Mnuchin to take a stake in airlines as part of the grant and loan agreements.
As part of the grant approval process, the firms must sign payroll-support agreements that detail the terms, as well as any limits on executive compensation required under the law and provisions to claw back the funds if a company fails to satisfy the terms and conditions.
The department said it will continue to provide guidance and updates on program implementation under the CARES Act online here.
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