Washington — America West Airlines has received final clearance for a government-backed $429 million loan, but other major airlines may not agree to the strict stipulations federal authorities require.
Congress approved $10 billion in loan guarantees as part of the airline bailout package prompted by the Sept. 11 attacks. So far, cash-strapped America West is the only major airline to tap into the fund.
Under the deal announced Monday, the federal government agreed to repay up to $380 million if America West defaults on the loan. In return, America West had to give the government the option over 10 years to buy one-third of the company's publicly traded stock at a fixed price 18.7 million shares at $3 each.
America West shares closed Monday at $3.15, down 57 cents.
So far, the only other airline to apply for a loan guarantee is Vanguard, a small, low-fare carrier based in Kansas City, Mo. Airlines have until June 28 to apply.
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