Airlines want U.S. Treasury to scrap proposal to make some grant money repayable

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Major U.S. airlines were urging Treasury officials and the federal government's outside advisers on Saturday to scrap or revise a proposal that would make part of the $25 billion earmarked by Congress to help keep workers on the payroll repayable in the form of low-cost loans. Treasury Secretary
By David Shepardson and Tracy Rucinski

WASHINGTON/CHICAGO (Reuters) - Major U.S. airlines were urging Treasury officials and the federal government's outside advisers on Saturday to scrap or revise a proposal that would make part of the $25 billion earmarked by Congress to help keep workers on the payroll repayable in the form of low-cost loans.

Treasury Secretary Steven Mnuchin told the airlines on Friday the government would require them to repay 30% of the grants in low-cost loans over 10 years -- with the first five years at 1% interest -- before the interest rate would rise. The government is also seeking warrants equal to 10% of the loan amount.

U.S. airlines have idled more than 2,200 airplanes, a third of the fleet, canceled hundreds of thousands of flights and sought to shore up their balance sheets as travel demand has fallen by about 95% because of the coronavirus pandemic.

Airlines, in calls with U.S. Treasury officials and the government's outside advisers, were making the case that Treasury…
By David Shepardson and Tracy Rucinski
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