US Treasury, airlines reach deal on aid to avoid bankruptcy amid coronavirus pandemic

US Treasury Secretary Steven Mnuchin and major US airlines have reached an agreement on aid amid the coronavirus pandemic, in a bid to pay workers and avoid bankruptcies in the industry.

The indsutry employs as many as 7,50,000 people.

On Tuesday, the Treasury came to terms with 10 airlines, including the four largest -- Delta Air Lines, Americans Airlines, United Airlines and Southwest Airlines.

Some were initially hesitant to accept the money for fear of nationalisation despite the damage done by the virus, which has brought air travel to a standstill.

Congress last month approved a USD 2.2 trillion stimulus plan to rescue the world's largest economy, which includes USD 25 billion for airlines to continue paying employees' salaries and benefits until September 30.

It's expected that the US government would become a minority shareholder in the airlines.

In his statement, Mnuchin said the deal "will support American workers and help preserve the strategic importance of the airline industry while allowing for appropriate compensation to the taxpayers."

In talks last Friday, the Treasury informed the airlines that they'd have to pay back 30 percent of the money they received.

The federal government also wanted warrants in exchange for the help.

Airlines are also eligible for another USD 25 billion in loans to help them resume operations after the pandemic caused air traffic to plunge, meaning carriers to suspended routes, cut back on orders and cancelled hundreds of flights.