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Written by David Shepardson
WASHINGTON (Reuters) – The U.S. Treasury Department said on Friday that it had received $556.7 million in proceeds from auctions for orders at 11 major U.S. airlines that the government received in exchange for coronavirus aid.
The proceeds are a small portion of the total aid given to airlines.
Congress approved $54 billion in coronavirus bailouts for air carriers in 2020 and 2021. The airlines were required to repay $14 billion of that total, and the Treasury Department received orders to purchase shares at the share price at the time of the awards.
The notes expire between April 2025 and June 2026.
The Treasury Department set minimum order prices at a total of $458 million. A Treasury spokesman said the government plans to publicly announce individual auction sale prices later this summer.
American Airlines (NASDAQ:) received $12.6 billion in government aid, followed by Delta with $11.9 billion, United Airlines with $10.9 billion, and Southwest with $7.2 billion.
Seven other airlines received smaller awards, including $2.2 billion for Alaska Airlines.
The Treasury Department set reserve prices of $221 million for Delta’s bonds, $159 million for United, $25 million for American Airlines, and $30 million for United Airlines. Sky West (NASDAQ:), $17 million Alaska Airlines (NYSE:), $2.7 million to Hawaiian Airlines, $1.9 million to Frontier Group, and $1.7 million to Southwest.
The Treasury Department requested at least $50,000 for each airline in exchange for its guarantees in the Allegiant case. Spirit Airlines (NYSE:) and JetBlue. These and other guarantees were priced below the current trading prices of the carriers’ shares.
Southwest Airlines (NYSE:) and Delta Air Lines (NYSE:) declined to comment, while the other airlines did not immediately respond to requests for comment.
The US government also provided $25 billion in low-cost loans to airlines.
The 2020 pandemic caused a historic collapse in demand for air travel. US passenger air travel fell 60% in 2020 to its lowest level since 1984, a decline of more than 550 million passengers, as airlines cut costs and struggled to survive.
