SkyWest to receive $250m under US Payroll Support Program 3 agreement

US carrier SkyWest Airlines is to receive a total of $250m through Payroll Support Program 3 (PSP 3) under the American Rescue Plan Act of 2021.

On 23 April, the airline received half of the amount while the remaining is expected in the second quarter of this year.

Approximately $45m will be in the form of a ten-year, low-interest unsecured term loan, and SkyWest will issue to the US Treasury Department warrants to purchase approximately 78,317 shares of SkyWest common stock at a strike price of $57.47.

The carrier will use the funds to pay wages, salaries and benefits to thousands of SkyWest Airlines employees.

Similar to the first two programmes, PSP 3 comes with certain restrictions such as avoiding involuntary terminations and furloughs through 30 September 2021.

SkyWest also received $35m in further funding under PSP 2.

Approximately $10m of the additional funding under PSP 2 will be in the form of a ten-year low-interest unsecured term loan.

The US Department of Treasury will be allowed to purchase approximately 25,958 shares of SkyWest common stock at a strike price of $40.41.

Besides SkyWest, major carrier Delta Air Lines reportedly entered a PSP 3 agreement with the US Treasury.

The carrier expects to receive approximately $3.1bn, which will consist of approximately $2.2bn in grants and $890m in an unsecured ten-year loan.