Treasury Secretary Steven Mnuchin told Fox Business he will be meeting with airline advisors this week, as the coronavirus weighs in on the sector. Yahoo Finance’s Emily McCormick joins Seana Smith to discuss.

Video Transcript

SEANA SMITH: Welcome back to Yahoo Finance Live. Some of the airline stocks are among the biggest gainers in today's rally. We have JetBlue up just around 13% and American up just around 10% so far. Now the move higher comes following comments from Treasury Secretary Steven Mnuchin. Now he was saying that the administration is working hard to provide aid to the airlines in a timely manner. Take a listen to what he had to say on Fox Business earlier.

STEVE MNUCHIN: We have $6 trillion to put in the economy. We're meeting with all the advisors on the airlines this week. We're working very quickly on that. So I can assure you, the president has instructed us to get this money into the economy fast.

SEANA SMITH: --joins us now with more on this. And Emily, what do we know about timing at this point? Because it's interesting. It comes as Senator Chuck Schumer and also Speaker Nancy Pelosi urging management to accelerate the airline bailout.

EMILY MCCORMICK: Absolutely, Seana. So we do have Treasury Secretary Steven Mnuchin saying earlier today with Fox Business that he's planning to hold these meetings with airlines to negotiate terms of the deal of the funds that they will be allocated. And this is part of that $2.2 trillion stimulus package that we had passed back in late March.

What was officially put in that bill, that provides $29 billion in grants to airlines for payroll support, along-- and that includes $25 billion for passenger carriers and $4 billion for cargo operators, along with a separate $25 billion worth of loans or loan guarantees also to help on the financial side with airlines, which are, of course, suffering a huge demand hit amid the coronavirus outbreak.

So under this act, airlines are eligible to receive payouts equal to the payroll costs between April and October of last year. So that means Delta and American are in line to receive a maximum of about $7 billion each. United could receive some 6 and 1/2 billion or so and could also-- Southwest could also receive about 4.3 billion.

Now if this does actually exceed that $25 billion that had been earmarked for the passenger carriers, that could be pared back by the Treasury Department. So that's one of the things that will be up for discussion as Mnuchin goes into these negotiations with the airlines.

There are some other terms of the grant, so this isn't a completely no strings type of deal. Those preliminary requirements means that the companies receiving grants will be barred from furloughing workers until September 30th and also could not issue dividends or buy back their stock until late 2021. So those are a couple terms that the airlines would actually have to abide by if they do accept this deal.

And other terms of the grant could require airlines maintain service levels as far out as 2022, meaning that they would have to continue service areas and routes. And another potential sticking point is that the Trump administration has discussed potentially taking partial equity stakes in these airlines. That's something that the carriers have pushed back on, is definitely going to be something discussed later this week as well.

SEANA SMITH: Yeah, Emily, it's interesting. You were talking about the terms of the deal, because what are the concerns about some of those strict conditions tied to the aid? Because I was reading some things, just in terms of the fact that airlines might then be reluctant to accept the aid from the federal government. Is that true?

EMILY MCCORMICK: Absolutely. So that is something that's being discussed, but at the same time, these airlines really are in a bind. We already know that they're expecting major financial hits for the first and second quarter. I mean, we have Delta having sent in a message to employees last week that they expect second quarter revenue to be down 90%.

I mean, just looking at some data from the TSA, we have that website showing traveler throughput yesterday was just 108,000 nationally. That's versus 2.3 million for the same weekday last year. So really, it goes to show the tremendous decline that we've seen in travelers.

And that just means less revenue, and ultimately, less profitability for these airlines. So they really do need these funds in order to keep paying employees, just keep the lights on. And it's something that does put them in a difficult position in these negotiations.

SEANA SMITH: All right. Thanks, Emily.