Government profits as American and Sun Country repay CARES Act loans

Flush with cash and optimistic for the future, US airlines have begun paying back some of the loans they received from the federal government through the CARES Act during the depths of the Covid-19 crisis. American Airlines went first with a rare debt prepayment press release declaring its $550m CARES Act loan repaid on March 24. Sun Country Airlines followed a day later announcing the prepayment of its own $45 million loan. “This prepayment is a shining example of the importance of the CARES Act,” American CEO Doug Parker said in a statement. “This important legislation … stabilized our industry and kept our workforce intact.” But the US Treasury Department did not just get taxpayers’ money back from American and Sun Country. A new analysis from Cowen & Co. shows the government made a roughly 21% annualized return on its loan and warrants to American — beating most major stock indices in returns over the past year.<br/>