US Treasury talks continue on $25b in aviation grants

Talks between US airlines and the Treasury Department over how to award $25b in cash grants earmarked for payroll assistance due to the coronavirus outbreak were set to continue into the evening Tuesday, people briefed on the matter said. Airlines and the Treasury have been in talks since last week over what compensation the government will demand as a condition of the grants. Treasury has sought additional information from airlines as the talks have progressed on a formula for determining government compensation, the people said. The Treasury Department declined to comment on Tuesday. Treasury Secretary Steve Mnuchin has repeatedly said taxpayers will be “compensated” for the grants and that the assistance is not a “bailout,” while some Democrats in Congress and aviation unions have urged him not to demand equity or warrants. Under the law, Mnuchin can demand equity, warrants or other financial instruments to “provide appropriate compensation to the federal government.” Earlier Tuesday, the US DoT finalized minimum service rules for airlines receiving assistance. The department said where multiple airports serve the same point, carriers do not need to maintain service to all of them, which would “impose undue costs.” <br/>