MIAMI – American Airlines (AA) on Friday announced that it received a loan of US$5.5bn from the US Treasury with the possibility of getting up to US$2bn more in October if the Treasury allocates extra funds in a US$25bn loan package for airlines.

American Airlines professes to have already withdrawn US$5.5bn from the loan bringing its debt to US$42bn. The initially allocated US$4.75bn funds have been earmarked for other carriers. However, Delta Air Lines (DL) and Southwest Airlines (NW) have said they will not take their share, leaving the possibility of AA receiving more financial aid. Other airlines may decline their shares by September 30 as well.

Airlines initially received a separate US$25bn in April under the CARES Act, primarily as grants to avoid layoffs and furloughs through the end of this month. In mid-September, US Airlines and labor unions sought another US$25bn bailout package as the CARES act is set to expire on October 1.

American Airlines Airbus A321 at PHX Photo: Brent Foster – @5starflight

COVID-19 Adaptation

American Airlines, the largest airline in the world, faces a great challenge in continuing to adapt to the decreased passenger numbers resulting from COVID-19.

The airline has had to lay off 19,000 employees and cut service to 15 markets while also announcing some new routes to small towns like Appleton (ATW).

Overall, AA has faced significant challenges resulting from the pandemic but is also set to receive significant government aid which with time will hopefully help the airline prepare for post-pandemic success.

Featured image: American Airlines at LAX. Photo: Luca Flores