The US Treasury is proposing to provide the country’s airline sector with $50 billion of secured loans, not grants as the industry had requested, tied to conditions which include limits on executive pay.
The secured loans would be advanced via the US Exchange Rate Stabilization Fund (ESF), which as the name implies is typically used to intervene in global currency markets.
The leaked memo said that the $50 billion Airline Industry Secured Lending Facility would be advanced via the ESF for the purpose of providing funding to US passenger and cargo air carriers
The memo said that Treasury Department would determine the appropriate interest rate and other terms and conditions of the loans, such as the types of collateral that carriers would be required put against their borrowing.
In addition to providing collateral for the loans any airline making use of the secured lending facility would be required to adhere ton specified continuation of service requirements, and limits on increases in executive compensation until repayment of the loans.