US carriers agree $25 billion state payroll bailout

US airlines have agreed a $25 billion financial lifeline deal with Washington to help towards survival through the coronavirus crisis.

The rescue package is part of a $2 trillion emergency relief bill agreed by the US government last month.

The payroll bailout covers Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, United Airlines, SkyWest Airlines and Southwest Airlines.

The support has been thrashed out against a backdrop of projections suggesting the US airline sector will burn through $10 billion to $12 billion a month as carriers have cut capacity as much as 80% while parking thousands of aircraft.

US Treasury secretary Steven Mnuchin said the payroll support programme for passenger air carriers “will support American workers and help preserve the strategic importance of the airline industry while allowing for appropriate compensation to the taxpayers”.

He added: “We look forward to working with the airlines to finalise the necessary agreements and disburse funds as quickly as possible.”

Delta chief executive Ed Bastian said in a message to staff: “This is an essential step, but just one of many that will get us through the next several months.

“The funding, along with self-help measures we have taken, will prevent furloughs and pay rate reductions through the end of September, despite the 95% drop we’ve seen in passenger traffic.”

American Airlines chief executive Doug Parker and president Robert Isom said: “With this level of assistance, we now believe we have the financial resources necessary to help us withstand this crisis and be in position to serve the travelling public when they are ready to start flying again.”

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