Treasury Secretary Steven Mnuchin said he isn’t considering providing additional money to help airlines reeling from the impact of Covid-19.
U.S. airlines reached deals to access a share of $50 billion in federal payroll assistance to bridge funding gaps as the industry waits for customers to start flying again. Companies accepting the aid can’t furlough or reduce wages for workers until Sept. 30.
“At the moment there are no thoughts for changing those restrictions or additional money,” Mnuchin told reporters Wednesday during a video conference. “This money was critical to keep the airlines together, which was important for national security.”
Many airlines announced the possibility of thousands of job cuts after September, including United Airlines Holdings Inc., Delta Air Lines Inc., and Southwest Airlines Co.
Airline analyst Helane Becker of Cowen & Co. said as many as 105,000 jobs could be lost in the industry unless there’s a quick improvement in demand.
Half of the money Mnuchin is disbursing is in payroll grants, while the rest are loans. He has so far doled out more than $12 billion to 93 companies, and more is expected to be sent out on a “rolling basis,” the department has said.
“We’ve struck the right balance of both payroll support and offering them lending facilities which will also create additional liquidity,” Mnuchin said. Airlines can also turn to the Federal Reserve for support, he said.
Among the Fed’s coronavirus-related programs is the Main Street lending facility for mid-size businesses. Mnuchin has so far committed $75 billion from Treasury’s Exchange Stabilization Fund to backstop that program, which can create as much as $600 billion in liquidity.
The Fed has not yet launched the program.
Mnuchin said Wednesday he’s open to adding more money should the program prove popular.
