American Airlines secures $5.5 billion loan

Photo: © Phillip Rohmberger / IFN

American Airlines has secured a government-issued loan, worth almost 5.5 billion US Dollars, the airline confirmed on Friday. This is above a previous agreement for about US $4.7 billion.

The loan is provided by the United States Department of the Treasury as part of a US $25 billion aid package for US-based airlines. Authorization for the funding dates back to March, when Congress approved the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

American Airlines says it has immediately borrowed US $550 million of the assigned funds. Although the now approved aid for the company stands at US $5.477 billion, it can be extended to up to $7.5 billion if needed, subject to approval by the Treasury.

The carrier is just one of many struggling with the ongoing Covid-19 pandemic and the resulting economic crisis that is hitting the travel industry particularly hard. Several major airlines around the world were able to secure government-backed funding, either through loans or share purchases.