U.S. Treasury agrees on loan terms with American, four other airlines
The U.S. Treasury said on Thursday it has agreed on terms for government loans with five U.S. carriers, including American Airlines Group Inc (AAL.O).
The Treasury said it had signed letters of intent with American, Frontier Airlines, Hawaiian Airlines (HA.O), SkyWest Airlines (SKYW.O), and Spirit Airlines (SAVE.N) under a $25 billion emergency loan program created by Congress in March.
American said on Thursday it expects to close on a $4.75 billion Treasury loan in the third quarter on top of $5.8 billion in payroll assistance it was previously awarded.
American Chief Executive Doug Parker and President Robert Isom warned employees on Thursday that it may face significant overstaffing as it tries to win voluntary departures.
“We currently anticipate having 20 to 30% — or more than 20,000 — more team members on payroll than we need to operate our schedule this fall,” they wrote in an employee memo. “To be clear, this doesn’t mean 20,000 of our team members will be furloughed in October, it simply means we still have work to do to right-size our team for the airline we will operate.”