Originally Posted by
StuckOnReserve
CARES act and SBA loans are different stimulus packages. If you had read SH’s Update #9 you would know that XJT has already made an application to USTres for the grant/loan and they were negotiating terms. However the money the company would be receiving would not cover all the company’s payroll needs. Hence the subsequent announcement of the Reduced Flying Lines for May and beyond.
The CARES act contains both SBA loan provisions and the airline stimulus packages. The question is, will there be a enough money. Probably not. The SBA side is already out of money and it's been about 2 weeks. H.R. 748. Sec 4112 (a)(1):
Financial Assistance For Employee Wages, Salaries, And Benefits.—Notwithstanding any other provision of law, to preserve aviation jobs and compensate air carrier industry workers, the Secretary shall provide financial assistance that shall exclusively be used for the continuation of payment of employee wages, salaries, and benefits to—
(1) passenger air carriers, in an aggregate amount up to $25,000,000,000;
United, just one carrier is losing 100 million in revenue every day. Let's see how fast these funds dry up. We all know little old ExpressJet along with all regionals will be last priority. I think it's a pipe dream for people to somehow think they are protected until September just because the act has a date range until September. If they run out of money, all bets are off unless they increase the amount.
Another part of the bill:
SEC. 4114. REQUIRED ASSURANCES.
(a) In General.—To be eligible for financial assistance under this subtitle, an air carrier or contractor shall enter into an agreement with the Secretary, or otherwise certify in such form and manner as the Secretary shall prescribe, that the air carrier or contractor shall—
(1) refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020;
(2) through September 30, 2021, ensure that neither the air carrier or contractor nor any affiliate of the air carrier or contractor may, in any transaction, purchase an equity security of the air carrier or contractor or the parent company of the air carrier or contractor that is listed on a national securities exchange;
(3) through September 30, 2021, ensure that the air carrier or contractor shall not pay dividends, or make other capital distributions, with respect to the common stock (or equivalent interest) of the air carrier or contractor; and
(4) meet the requirements of sections 4115 and 4116.