The U.S. Treasury Department said on Saturday it has released $9.5 billion in additional funds from the Payroll Support Program to U.S. air carriers, bringing to $12.4 billion the total provided to the airline sector hit hard by the coronavirus pandemic, Reuters informed.
In total, the government has disbursed grant funds to 10 major airlines and 83 smaller carriers.
Congress approved $25 billion in grants for payroll assistance for passenger airlines. Treasury required major airlines receiving more than $100 million in assistance to repay 30% in low-interest loans over 10 years and issue warrants equal to 10% of the loan amount.
Airlines must not cut pay or jobs through Sept. 30 as a condition of the grants and are barred from buying back stock or paying dividends and face restrictions on executive compensation.
SkyWest’s Chief Executive Chip Childs told employees on Friday the airline expects to receive $438 million from Treasury in payroll assistance.
“There is still much about the future and recovery that remains uncertain, and there is a very real possibility that we could be a smaller airline by the end of the year,” he wrote in a email seen by Reuters.
The four largest U.S. carriers are receiving $19.2 billion in total out of the $25 billion – American Airlines Group, Delta Air Lines Inc, United Airlines Holdings, and Southwest Airlines.
Treasury is awarding major carriers 50% of the grant funds initially and then releasing the remainder through July. The department said additional money will continue to be provided to approved applicants “on a rolling basis.”