Unlike airline assistance from March, this loan is not limited to the pay slip. American Airlines will use the funds for general corporate and certain operating purposes, in accordance with the terms of the loan. B, for example, the blocking allowance for use in dividends, share buybacks, executive compensation, etc. at least 12 months after the loan is paid off. Americans must also maintain a minimum total liquidity of $2.0 billion. The details of the terms of the new loans for the Americans and others were not immediately clear. The Treasury said it would release the documents within 72 hours of the agreements, which, according to U.S. comments, could take weeks. American expects to close the $4.75 billion loan in the third quarter, Board Chairman Doug Parker and Chairman Robert Isom wrote in a letter to employees Thursday. The airline has previously stated that it wants to promise its loyalty program as a guarantee. American is generally considered the weakest financially of the largest U.S. airlines after entering the pandemic with the largest mountain of debt. Isom said in May that the airline was considering using its AAdvantage loyalty program as collateral for a federal loan.
As a result, the Treasury may allocate additional funds to other U.S. airlines seeking a loan. It is not clear whether American wants to increase its current credit term by an additional $2 billion. Although American Airlines has a high long-term debt relative to its counterparts, if it needs financing and the government provides them at an attractive interest rate, it may be helpful for the airline to opt for the state loan. Airlines are expected to cut thousands of jobs in October when federal wage assistance expires. Many encourage workers to stop or retire. This is because some other U.S. airlines, such as Southwest Airlines and Spirit Airlines, have waived previously public loans.
Instead, these airlines sought the private market for financing. American Airlines said it had signed a $4.75 billion loan with the Treasury, in addition to the $5.8 billion the Treasury has already agreed to extend on American. AA had been one of the leading U.S. airlines that lobbied for a government loan. The operator has pledged to cooperate with the Ministry of Finance on financing. Like all airlines, American executives worked to support the airline`s liquidity position and emerge from the crisis. The American team has consistently pointed out that government lending is one of the best ways to do so. The Department of Finance has indicated to American that it will provide additional funds that could increase the airline`s loan to $7.5 billion, subject to final approval by the Treasury.
The Department of Finance indicated that, in addition to American, Frontier Airlines, Hawaiian Airlines, SkyWest Airlines and Spirit Airlines Inc., credit conditions and Memorandums of Understanding had been signed. American Airlines and the U.S. Treasury entered into a credit agreement on September 25 that allows it to borrow up to $5.477 billion. By the deadline, she raised $550 million and, once elected, she can borrow until March 26 to borrow until March 26. American Airlines announced that on September 25, the airline entered into a state loan with the U.S. Treasury. The loan currently has a value of nearly $5.5 billion. However, the company has the option of increasing this credit to $7.5 billion, depending on how it operates at the Treasury. As part of an assistance program to help the industry overcome the coronavirus pandemic, the U.S. Treasury has agreed on the terms for loans to American Airlines Group Inc.
and four small airlines. All U.S. p airlines