Delta reveals deal for another $US3.1bn in payroll support

Delta Air Lines will receive $US3.1 billion in support to cover pay for employee wages, salaries and benefits under a deal inked with the US government. A filing by the US carrier with the US Securities and Exchange Commission shows the relief payments are expected to consist of about $US2.2 billion in grants and $US890 million in an unsecured 10 -year loan. The grant is roughly the same value as the deal that saw Delta and Northwest Airlines merge in 2008. READ: Airlines say details critical for summer US-Europe travel. The airline said it had already received a payment of $US1.5 billion under the “Payroll Support Program 3” agreement on April 23 and it expected to get the balance in the June quarter. About 70 percent of the April 23 payment was in the form of a grant. “The payroll support payments are also conditioned on, among other things, Delta’s agreement to refrain from conducting involuntary employee layoffs or furloughs from the date of the agreement through September 30, 2021, or the date on which Delta has expended all of the payroll support, whichever is later,’’ the SEC 8-K filing said. “Other conditions include prohibitions on share repurchases and dividends through September 30, 2022, and certain limitations on executive compensation until April 1, 2023.” Delta had already received $US2.9 billion under the Payroll Support Program 2 agreement and said it expected to receive an incremental installment of about $US430m under that program. The filing comes after the US giant on April 22 announced it had placed a firm order for 25 Airbus A321 neo aircraft in addition to its 2017 order for 100 A321neos. The airline said it had also accelerated delivery of two A350-900 aircraft as well as two A330-900neosw. “With our customers ready to reclaim the joy of travel, this agreement positions Delta for growth while accounting for the planned retirements of older narrowbody aircraft in our fleet, reducing our carbon footprint, increasing efficiency and elevating the customer experience,”  Mahendra Nair, Delta’s Senior Vice President – Fleet Strategy said at the time.