Mesa Air Group has released that it expects to receive US$92.5 million in assistance from the Treasury Department under the Payroll Support Program as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act. The funds can only be used for the continuation of payment of employee wages, salaries, and benefits for the period April 1, 2020, to September 30, 2020. The company is finalizing the agreements with the Treasury Department and expects it will be completed shortly.
The company has agreed to certain conditions under the program, such as: prohibitions against involuntary furloughs and reductions in employee pay rates and benefits through September 30, 2020; the elimination of share repurchases and dividends until September 30, 2021; and limits on executive compensation until March 24, 2022. Because the amount of payroll support is less than US$100 million, the company will not be required to enter into a loan or equity agreement with the Treasury Department. The company is also considering applying for federal loans through a separate program under the CARES Act.
Mesa Air Group, headquartered in Phoenix, AZ, is the holding company for Mesa Airlines, a regional carrier operating as American Eagle and United Express Airlines pursuant to the terms of capacity purchase agreements entered into with American Airlines and United Airlines.
Southwest Airlines has also finalized an agreement with the United States Department of Treasury. Southwest will receive more than US$3.2 billion in disbursements over the next several months. The funding supports job protection for more than 60,000 Southwest Employees through September 30, 2020.
The deal allows Southwest to receive an immediate payment of approximately US$1.6 billion of the more than US$3.2 billion total proceeds, and the remainder will be paid in installments during May, June, and July.Email Post to a Friend