American Airlines has agreed to a $ 5 .5 billion loan from the US Treasury as it aims to ride out the downturn caused by the coronavirus , the carrier announced Friday.
The airline , which has said it could lay off as many as 19 ,000 employees next month without another relief package from Congress, said the financing will “ help us shore up our longer-term liquidity until demand returns ,” according to a message to employees.
The loan, authorized as part of the massive CARES Act federal relief package passed this spring, adds to American ’ s mounting debt level , which is higher than that of other leading US carriers.
The Treasury Department told the carrier that the loan could be boosted to as much as $ 7 .5 billion, “ although such amount is subject to final approval by the Treasury, ” American said in a securities filing.
The CARES Act also provided $ 25 billion in Payroll Support Program ( PSP ) funds for US carriers, including $ 5 .8 billion to American.
US airlines that took PSP funds committed to not undertaking any involuntary job cuts through the end of September . American has said it could lay off 19 ,000 workers starting in October if there is not a new relief package.
Airline CEOs visited the White House on September 17 to lobby for such legislation , but talks in Congress have stalled amid intensifying partisanship ahead of the November presidential election .