American Airlines and four smaller carriers have reached agreement with the government for billions more in federal loans, a sign of the industry's desperate fight to survive a downturn in air travel caused by the virus pandemic.
The Treasury Department said Thursday that it had finalized terms of new loans to American, Spirit Airlines, Frontier Airlines, Hawaiian Airlines and SkyWest Airlines.
All the leading U.S. airlines had previously accepted a combination of grants and loans to help cover payroll costs through Sept. 30. These five are the first carriers to accept loans from a separate $25 billion kitty that Congress set aside under a $2.2 billion measure to help companies hurt by the pandemic.
Treasury Secretary Steven Mnuchin said his department was still talking with other airlines about loans and hopes to reach agreements as soon as possible.
Analysts believed interest in the second batch of federal loans would be lower because of the terms -- including giving the government a potential ownership stake -- and the availability of money from private sources. Major carriers including American, United, Delta and Southwest have raised billions in available cash on the private credit market.
Air travel within the United States fell about 95% from March 1 through mid-April. It has recovered slowly since then, but the number of airline passengers is still about 75% below year-ago numbers.