Originally Posted by
UAL97
Whether they take the loan money or not has nothing to do with the number they can furlough. The CARES Act protects us until September 30. Those loan stipulations of 10% furloughs are for companies other than airlines.
It is my understanding that there are two separate programs as it applies to Airlines.
- the Cares Act Payroll support program, which we have allready taken (3.5ish $M grant and 1.5ish $M loan) money from requires: "No involuntary furloughs or layoffs will occur until September 30, 2020 nor will employee wages or benefits be reduced until such date. "
- then the Cares Act loan program, which we have applied (4.5ish $M loan) for and would potentially use if approved requires: "Borrower, until September 30, 2020, will not reduce its employment levels as of March 24, 2020, and after such date will not reduce its employment levels by more than 10%."
So, the 10% number I mentioned is a bit tricky, since it applies to total employment numbers and it also only applies if we actually take any of the addl 4.5$M money from the actual loan program. An excerpt from the company press release about these is below and several google sources discuss the differences and include the 10% reduction restriction in the Loan program side even for airlines.
Our 8-K outlined specifics about the approximately $5 billion in grant aid and loans that we expect to receive pursuant to the Payroll Support Program under the CARES Act to pay salaries and pay rates and benefits to tens of thousands of United employees. Of the $5 billion the Company expects to receive, approximately $3.5 billion will be a direct grant and approximately $1.5 billion will be in the form of a low-interest 10-year loan, which is expected to be pre-payable at par at any time. In addition, today’s 8-K notes an application we submitted on Friday under the Loan Program of the CARES Act that we expect will give us the ability, through Sept. 30, 2020, to borrow up to $4.5 billion from the U.S. Treasury Department for a term of up to 5 years in the form of a senior secured obligation of the Company.
In connection with any borrowings under the Loan Program and with the receipt of any funds under the Payroll Support Program, the Company and its business will be subject to certain restrictions and also expects to issue to the U.S. Treasury Department warrants to purchase shares of United Airlines Holdings, Inc. common stock.