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WASHINGTON - The U.S. Treasury Department has set a minimum of $492 million in total it is seeking in next week's auctions to sell warrants to purchase shares in U.S. airlines the government received in exchange for COVID-19 assistance.
Congress approved $54 billion in COVID-19 air carrier bailouts in 2020 and 2021. Airlines were required to repay $14 billion of that total and Treasury received warrants to purchase stock at the share price of the time of the awards.American Airlines received $12.6 billion in government assistance, followed by Delta Air Lines $11.9 billion, United Airlines $10.9 billion, and Southwest Airlines at $7.2 billion.Treasury plans to auction its warrants in the 11 airlines starting Monday.
Treasury set reserve prices of $221 million for its Delta warrants, $159 million for United, $59 million for American Airlines, $30 million for SkyWest, $17 million for Alaska Air, $2.9 million for Hawaiian Airlines, $1.9 million for Frontier Group and $1.7 million for Southwest. The Treasury is seeking at least $50,000 per airline for its warrants in Allegiant, Spirit Airlines, and JetBlue. Those warrants and others are priced below the current trading prices of the carriers' stocks.The U.S. government also extended $25 billion in low-cost loans to airlines. Treasury said"the proceeds of these sales will provide additional returns to the American taxpayer from the financial assistance and liquidity that Treasury provided to these airlines during the pandemic.
The pandemic prompted a historic collapse in air travel demand. U.S. air passenger travel fell by 60% in 2020 to its lowest since 1984, down more than 550 million passengers, as airlines slashed costs and struggled to survive.It has been our privilege to have the trust and support of our East Coast communities for the last 200 years. Our SaltWire team is always watching out for the place we call home.
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