Allegiant Travel Company announced this week an agreement with the U.S. Department of the Treasury to receive $171.9 million in emergency relief under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The Payroll Support Program (PSP) funds are targeted to support team member salaries and benefits for Allegiant's 4,500-member workforce.
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| Photo Allegiant |
"The Payroll Support Program recognizes the essential role our team members play in our country's air travel infrastructure," said Maurice J. Gallagher, Jr., Allegiant chairman and CEO. "Their dedication in the face of the unprecedented crisis brought by the COVID-19 outbreak has been tremendous – and their continued work will be critical to our nation's successful recovery in the months to come. On behalf of our entire team, I'd like to applaud the work of the administration, Treasury and the Department of Transportation, our hometown Nevada delegation, leadership of both houses of Congress and the Aviation Subcommittees for both the Senate and House for taking swift, bipartisan action to protect the jobs of our frontline team members. We thank you for your support and look forward to working with you to ensure Americans can once again be together, connecting with family and friends and conducting the business of our great nation."
The PSP is expected to provide Allegiant with $171.9 million in funding and will cover approximately 76 percent of budgeted payroll and benefit costs through September 30, 2020. Of that funding, $21 million will be in the form of a 10-year term, low-interest loan, to be repaid at any time prior to maturity at par. Under the loan, the company will issue warrants to the U.S. Department of the Treasury to purchase 25,890 shares of common stock with a cash settlement right at the company's option.
"We are incredibly grateful to the partners who made this critical support possible, but also want to thank our team members, who have stepped up in force to support the company during this unprecedented time," said Greg Anderson, chief financial officer. "So far, more than 1,100 team members – 25 percent of our workforce - are already participating in a voluntary short-term leave program or voluntary pay reductions. Further participation will go a long way to maximize the payroll assistance funds and extend their impact as long as possible. We appreciate their action and know this shared sacrifice will be crucial to weathering the storm. With so much uncertainty regarding the arc of the coronavirus outbreak and when demand for travel will return, we believe the airlines maintaining the most flexibility will be best positioned to emerge from this crisis even stronger."
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