July 2 (UPI) -- American Airlines and four other carriers signed an agreement with the Treasury Department for portions of $25 billion in federal loans to help the industry survive the coronavirus pandemic and associated travel restrictions.
Frontier Airlines, Hawaiian Airlines, Sky West Airlines and Spirit Airlines joined American in signing letters of intent for the loans, provided through the Coronavirus Aid, Relief and Economic Security (CARES) Act passed in March, according to the Treasury Department.
"We are pleased that major air carriers intend to use this important program and for Treasury to use its authority under the CARES Act to provide much-needed financial assistance, while ensuring appropriate taxpayer compensation," Treasury Secretary Steven Mnuchin said in a statement. "Conversations with other airlines continue, and we look forward to finalizing agreements as soon as possible."
The agreements come as airlines continue to make adjustments while trying to navigate dramatic changes in the travel industry because of the coronavirus. Alaska Airlines, for example, announced Thursday it secured almost $1.2 billion in private loans to help it continue operating during the coronavirus pandemic.
The airline, which has hubs in Anchorage; Los Angeles; Portland, Ore.; San Francisco; and Seattle, serves more than 115 destinations across the United States and North American with its regional partners.
"We're proud of what our people have built at Alaska," Shane Tackett, Alaska's executive vice president of finance and chief financial officer, said in a statement. "Because of our long-standing commitment to conservative financial management and a strong balance sheet, we were fortunate to see strong demand for our offering."
Alaska Airlines said it put 61 of its own aircraft up as collateral until the Series A and Series B loans are repaid in 2027.
"With this financing and the actions we've taken to reduce our cash burn rate, we've created a liquidity runway that rivals our strongest competitors," Tackett said.
The move was another indication of how airlines continue to find ways to survive during the coronavirus pandemic and its travel restrictions.
Hawaiian Airlines said Wednesday it will resume a reduced schedule between Hawaii and most of its U.S. mainland gateway cities on Aug. 1 for passengers who have agreed to take part in its pre-travel COVID-19 testing program.
"The layered safety measures put in place to protect the health of our local communities promise to make travel to and from Hawaii more accessible than in recent months," Peter Ingram, president and chief executive at Hawaiian Airlines, said.
Hawaii Airlines had suspended most of its flights in late March due to the pandemic and the state's quarantine order for arriving passengers.
United Airlines said Wednesday it will add almost 25,000 flights next month, to operate at 40 percent of the schedule it flew in August 2019.