American Airlines secures £4.32 billion in government loan.

In an announcement on Friday, American Airlines (NASDAQ: AAL) revealed to have secured a government loan worth £4.32 billion. The company also expressed confidence that it would be able to secure access to an additional £1.57 billion next month once the U.S. Treasury’s £19.62 billion loan package is allocated to several airlines.

American Airlines jumped more than 2% in extended trading on Friday. On a year to date basis, shares of the company are close to 60% down in the stock market. Learn more about how to invest in the stock market.

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Southwest and Delta Airlines will not tap into the loan package

The U.S-based airlines have to decide before the start of October if they’d like to benefit from the U.S. Treasury loans amidst the COVID-19 crisis that resulted in an 86% decline in American Airlines’ revenue in the fiscal first quarter.

Originally, American Airlines was set to receive £3.73 billion from the government. Its peers, Southwest Airlines and Delta Air Lines, however, expressed no plans of tapping into the loan package last week, following which, other air carriers, including American Airlines, can now secure broader funding under the state-backed aid.

United Airlines, on the other hand, commented earlier this week that it will seek its share in the Treasury loans but refrained from specifying if it’s share will be valued at £3.53 billion or more.

American Airlines also said on Friday that on the back of its loyalty program, it has already withdrawn £431.54 million from the Treasury loan. It also recently closed a debt offering worth £940 million with Goldman Sachs.

CARES Act funded U.S. airlines with £19.62 billion in grants in March

In March, the U.S. government-backed CARES Act funded U.S airlines with £19.62 billion in grants in a bid to avoid furloughs and keep workers on the payroll until October.

The CARES Act aims to minimise the economic blow for the U.S air carriers attributed to COVID-19 that has so far infected more than 7 million people in the United States and caused over 200 thousand deaths. With passenger number still down roughly 70% due to the health crisis, the U.S. airline industry is pushing the government for a new £19.62 billion payroll support until March.

American Airlines also performed slightly downbeat in the stock market last year with an annual decline of about 10%. At the time of writing, the Fort Worth-based air carrier has a market cap of £4.90 billion.