Major U.S. airlines applied on Friday for payroll grants from the U.S. Treasury meant to keep workers employed during a sharp downturn resulting from the coronavirus outbreak, but while talks over the terms were expected to continue in coming days some warned the funds would not be enough to help them through their toughest crisis ever.
FILE PHOTO: Delta Air Lines passenger planes are seen parked due to flight reductions made to slow the spread of coronavirus disease , at Birmingham-Shuttlesworth International Airport in Birmingham, Alabama, U.S. March 25, 2020. REUTERS/Elijah Nouvelage
Treasury set a 5 p.m. EDT Friday deadline to expedite the grants. There is a second final deadline on April 27. In memos to employees, Delta and JetBlue executives warned that government funds would not be enough to help them weather an unprecedented crisis in which they are spending more cash every day than they are bringing in.
American’s stock hit a record low on Friday. Warren Buffett’s Berkshire Hathaway Inc, which is among the largest shareholders of the top U.S. airlines, said it sold about 18% of its Delta stake and 4% of its Southwest holding. Airlines have also raised debt and taken a series of cost-cutting measures as they ground an unprecedented number of planes and implement new policies on ticket refunds and exchanges in an effort to encourage passengers to book flights.Passenger airlines are eligible for $25 billion in cash grants, cargo carriers $4 billion, and airport contractors like caterers and airplane cleaners $3 billion, and an equal amount in loans.
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