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US airlines move towards federal loans as Covid-19 surge threatens demand, jobs

Chicago

THE largest US air carriers have signed letters of intent on federal loans to help them weather Covid-19, with United Airlines warning staff on Tuesday that a surge in outbreaks was hitting bookings, threatening a travel rebound and jobs. United employees should expect to receive as soon as this week, notices about potential furloughs effective Oct 1, the airline said.

While travel had picked up in some areas over the past two months from pandemic-driven lows in April, United has seen reservations for travel in the coming month slide.

It is among US airlines encouraging employees to accept voluntary departure packages to help prevent tens of thousands of job losses in the fall but said not enough workers have signed up ahead of a July 15 deadline to apply.

United and Delta were among US carriers - along with Alaska Airlines, JetBlue Airways and Southwest Airlines - that the US Treasury Department said on Tuesday had signed letters regarding the terms of a US$25 billion loan package under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Last week, the department said that it had agreed on the terms for government loans under the CARES Act with five other airlines including American Airlines. US airlines have already received US$25 billion in payroll aid under the CARES Act to protect jobs through September and have until Sept 30 to decide whether to take the loan. REUTERS

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