U.S. Treasury Secretary Steve Mnuchin said on Friday that the coronavirus economic stimulus bill before Congress is not an airline bailout and that taxpayers will be compensated for relief given to companies hobbled by the global pandemic.
At the same time, Mr. Mnuchin said in an interview with Fox Business Network that plane maker Boeing Co. has not requested government help.
“I’ve been very clear this is not an airline bailout,” Mr. Mnuchin said. “And that taxpayers need to be compensated for relief they’re giving to airlines.”
U.S. airlines are preparing to tap the government for up to US$25-billion in grants to cover payroll in a sharp travel downturn triggered by the coronavirus, even after the government warned it may take stakes in exchange for bailout funds, people familiar with the matter said.
Mr. Mnuchin can demand equity, warrants or other financial instruments in order to “provide appropriate compensation to the federal government.” A Treasury spokeswoman declined to comment on a report that Mr. Mnuchin would demand equity.
Airlines can ask for the equivalent of their payroll between April 1 and Sept. 30 of last year, according to the terms of the bill, meaning some large airlines could get US$4-billion or more in total.
The House of Representatives was to debate the legislation on Friday, then schedule a vote.
Mr. Mnuchin said Boeing said it does not intend to participate in the federal program. “Boeing has said that they have no intention of using a programme that may change in the future,” Mr. Mnuchin said. “These are things that the companies need to come and ask us for ... Right now Boeing’s saying they don’t need it.”
Asked if the large stimulus bill could help avoid a recession, Mr. Mnuchin told Fox Business, “The No. 1 issue is not what the economic numbers are right now, the No. 1 issue is the hardship to the American people who are losing their jobs.”