American Airlines secures $ 5.5 billion loan
American Airlines has secured a government-issued loan worth nearly US $ 5.5 billion, the airline confirmed on Friday. That’s on top of a previous deal for around 4.7 billion US dollars.
The loan is provided by the United States Department of the Treasury as part of a $ 25 billion assistance program for United States-based airlines. The funding authorization dates back to March, when Congress approved the CARES (Coronavirus Aid, Relief, and Economic Security) law.
American Airlines says it immediately borrowed US $ 550 million from the restricted funds. While aid now approved for the company stands at $ 5.477 billion, it can be extended up to $ 7.5 billion if necessary, subject to Treasury approval.
The carrier is just one of many struggling with the ongoing Covid-19 pandemic and the aftermath economic crisis which hits the travel industry particularly hard. Several major airlines around the world have been able to obtain government-backed financing, either through loans or through the purchase of shares.