Alaska Airlines and Horizon Air receive nearly $1 billion from federal government

Alaska Airlines and Horizon Air, which serve passengers from Bellingham International Airport, have received $992 million under the federal Payroll Support Program and the Coronavirus Aid, Relief, and Economic Security Act, according to a news release Thursday, April 23.

To receive the $725 million grant and $267 million loan, the airlines agreed to not require involuntary furloughs or cut pay rates or benefits through Sept. 30. Additionally, they must maintain minimum levels of air service required by the Department of Transportation.

The funding will cover about 70% of budgeted payroll costs for both airlines through Sept. 30. The estimates were based on similar costs of the airlines from April through September 2019.

“We’re extremely grateful for the leadership of all federal government officials involved in enabling this direct support for aviation employees during this time of significantly suppressed demand and near-zero revenue,” said Alaska Air Group’s Chairman and CEO Brad Tilden in the release.

“This support enables us to protect jobs and maintain critical transportation infrastructure while we work over the next few months to assess our business and make thoughtful decisions.”

The $267 million loan must be repaid to the federal government within 10 years. The Treasury Department also received warrants to buy 847,000 non-voting shares of Alaska Air Group common stock at $31.61 a share, based on the closing price of the stock on April 9.

Alaska and Horizon have also each applied for $1.1 billion in federal loan funding as part of a separate program under the CARES Act. Any funds loaned under this program must be paid back in full.