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Crippled US Airline Industry to Get $25 Billion Bailout, Part of It as Loans

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The Trump administration has reached an agreement in principle with major airlines over the terms of a $25 billion bailout to prop up an industry hobbled by the coronavirus pandemic. The Treasury Department said that Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, United Airlines, SkyWest Airlines and Southwest Airlines would participate. (www.nytimes.com) Más...

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watkinssusan
these are "loans" to the airline industry and will be paid back..i do not however understand the inclusion of stocks in this loan procedure..that sound illegal coming from the government,as airlines are supposed to be private corporations..

bidrec
Richard Haas 1
It looks like the stock part of the agreement is so that the taxpayer can benefit from any windfall that the airlines experience following this emergency. Treasury is not getting airline stock it is getting warrants to buy stock. So, in the case of Delta Treasury is getting a warrant to buy Delta at 24.39 a share. Right now 4/17/2020 Delta is 24.02 a share. In other words the warrant is worthless. If someone truly thinks that the treasury is getting a good deal they can buy Delta today for 37 cents less then the Treasury.

As far as them being private corporations Treasury is effectively routing money through them to their employees this way instead of paying unemployment insurance to them. It is a wash.

And a substantial amount of Skywest income is EAS supplementation from the federal government so...

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