Mnuchin told major airlines on Friday he wants them to repay some of the $25B in cash grants the Congress approved last month to cover payroll costs as airlines weather an unprecedented crisis due to the coronavirus
By David Shepardson and Tracy RucinskiThe Treasury said in a statement Mnuchin will not require passenger air carriers that will receive $100 million in payroll assistance or less to provide compensation and"funds will be available promptly upon approval of their applications."
Three people briefed on the matter said the warrants, which would give the government the right to buy equity at a pre-set price and time, would be equal to 10% of the value of the loan. The majority of the smaller requests sought less than $10 million and Treasury is not seeking compensation in order to maintain"needed air service," avoiding layoffs"and limiting share buyback and executive compensation."
Airline boards and officials plan to review the proposals all weekend and it is not clear if they will accept the terms or propose a counteroffer. Airline unions and Democrats in the U.S. Congress have pressed Treasury to grant the assistance quickly and without requiring unreasonable conditions on airlines that are struggling.
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