Several major U.S. airlines agreed to participate in the federal government's $25 billion payroll support program aimed at helping passenger air carriers and their workers cope with the coronavirus crisis, the Treasury Department said.
The 10 airlines include Delta Air Lines Inc., American Airlines Group Inc., Southwest Airlines Co. and United Airlines Holdings Inc.
"We look forward to working with the airlines to finalize the necessary agreements and disburse funds as quickly as possible," Treasury Secretary Steven Mnuchin said in a statement April 14.
Talks will continue with other airlines regarding their potential participation, Mnuchin added. The Treasury will also work on applications for smaller passenger air carriers.
The airline aid was part of the $2.2 trillion pandemic relief bill signed into law on March 27, but carriers initially balked at some of the conditions written into the aid package, in which the relief was tied to limits on layoffs, buybacks and executive compensation; minimum air service levels; and the amount to be recouped by the Treasury.
The International Air Transport Association, or IATA, said earlier April 14 that the estimated losses of global airlines from the coronavirus pandemic in 2020 have increased to $314 billion, representing a revenue decline of 55% from 2019. The industry group previously estimated the losses at $252 billion, representing a 44% year-over-year dip in revenues.
Demand for domestic and international travel could fall 48% on a yearly basis in 2020, owing to the expected economic downturn resulting from the COVID-19 crisis, severe domestic restrictions lasting for three months and slower-than-expected reopening of international routes, IATA said.
"The scale of the crisis makes a sharp V-shaped recovery unlikely. Realistically, it will be a U-shaped recovery with domestic travel coming back faster than the international market. We could see more than half of passenger revenues disappear," said Alexandre de Juniac, IATA's director general and CEO.