WASHINGTON/CHICAGO (Reuters) – Major U.S. airlines were urging Treasury officials and the federal government’s outside advisers on Saturday to scrap or revise a proposal that would make part of the $25 billion earmarked by Congress to help keep workers on the payroll repayable in the form of low-cost loans.
FILE PHOTO: Canceled flights are seen on an airport screen as the spread of coronavirus disease (COVID-19) continues, in New Orleans, Louisiana U.S., April 4, 2020. REUTERS/Carlos Barria
Treasury Secretary Steven Mnuchin told the airlines on Friday the government would require them to repay 30% of the grants in low-cost loans over 10 years — with the first five years at 1% interest — before the interest rate would rise. The government is also seeking warrants equal to 10% of the loan amount.
U.S. airlines have idled more than 2,200 airplanes, a third of the fleet, canceled hundreds of thousands of flights and sought to shore up their balance sheets as travel demand has fallen by about 95% because of the coronavirus pandemic.
Airlines, in calls with U.S. Tr