After weeks of speculation, United Airlines has finally confirmed the amount of money it will receive from the United States government to help cover staff payment. The Chicago-based carrier will receive $5 billion through the Payroll Support Program under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The airline shared the update in a press release sent out today. $3.5 billion of the package will arrive as a direct grant from the US Treasury Department while the remaining $1.5 will be a low-interest rate loan. As part of the program, United Airlines Holdings expects to issue warrants to the federal government, for the purchase of approximately 4.6 million shares of the company’s common stock.
United Airlines spokesperson Frank Benenati shared that the money will go along way in helping several departments within the company. Altogether, it will help it cover payroll until this fall.
“We thank Congress and the Administration for quickly passing legislation to protect the paychecks of tens of thousands of United Airlines employees and look forward to completing the final agreements with the Treasury Department in the next few days,” Benenati said.
“These funds will cover a portion of our pay and benefits costs through September 30, and we are thankful for the support provided to our employees and their families by the CARES Act.”
The firm highlights that its staff has been giving essential support to those in need across the US. It has been using part of its grounded fleet to ship medical supplies. Additionally, it has been operating special flights to help fly medical professionals and those stuck abroad during global travel restrictions.
The funds are part of a $25 billion support package for the struggling US commercial airline industry. The drop in passenger demand initially hindered the market, but restrictions have now outright damaged carriers, forcing them to ground the majority of their aircraft.
American Airlines, Delta Air Lines, Southwest Airlines, Spirit Airlines, JetBlue and Alaska Airlines have all reached deals for portions of the support package. The White House has pledged its support for the aviation industry since the restrictions were first put into place.
However, these carriers will be happy to be finally confirming the terms of their deals during these uncertain times. Nonetheless, there could be some airlines trying to apply for more financial support while the downturn in flight activity continues.
What are your thoughts on United’s support package from the US government? Do you think this will be enough to help them during this tough time? Let us know what you think in the comment section.