US: Treasury emergency aid loan goes to airline backed by Amazon and Apollo

The Treasury Department has lent $45m to an airline backed by both e-commerce giant Amazon and Apollo Global Management, a massive private equity firm that has benefited from at least one other government bailout earlier this year. The airline, Sun Country, had planned to go public this year as a way to raise large amounts of money, but those plans were delayed by the coronavirus pandemic. The loan, which is part of the emergency airline aid package approved in March, allows Sun Country to receive federal assistance without having to tap big backers such as Amazon and Apollo for the additional help. The airline applied for the funding through the normal Treasury process and put up its loyalty rewards program as collateral, according to Treasury. Such rewards programs generate significant cash for airlines through commissions they receive from banks when members use affiliated credit cards, said John Grant, a senior analyst with OAG. “In the wake of this unprecedented crisis, our management team has explored every possible avenue to conserve, hold, and access cash in order to ensure a sustainable business for our nearly 1,600 employees and their families while we wait for travel demand and revenue to return,” the company said. Sun Country applied for the loan in April, and it was approved in late October. The new government aid will help the company maintain cash reserves during a prolonged period of decreased demand for air travel. Funds affiliated with Apollo purchased the airline in 2017. Amazon, which reported its biggest profit ever during the pandemic, acquired a partial stake in Sun Country in 2019. “Sun Country went through the same vetting process as all other US airlines to determine our qualification for the loan and the size of the loan,” the company said. “Sun Country received less than 10% of its 2019 revenue, the smallest allocation in relation to its revenue among top airlines.”<br/>