American Airlines Psp Agreement

American Airlines PSP Agreement: What You Need to Know

The COVID-19 pandemic has hit the airline industry hard, and American Airlines (AA) is no exception. In order to survive, the airline needed financial support, which it received through the CARES Act. As part of the provisions of the Act, AA entered into a Payroll Support Program (PSP) agreement with the U.S. Department of the Treasury, which has significant implications for the airline, its employees, and its customers. In this article, we will take a closer look at the AA PSP agreement and its consequences.

What is the AA PSP Agreement?

The AA PSP agreement is a contract between American Airlines and the U.S. Department of the Treasury, which provides financial aid to the airline to help it support payroll and benefits for its employees. The agreement, which was signed in April 2020, is part of the CARES Act, which provided $25 billion in grants and loans to airlines to help them weather the economic fallout of the pandemic.

Under the terms of the agreement, AA received $5.8 billion in government aid, of which $4.1 billion was in the form of a grant that did not have to be repaid. The grant was intended to support the salaries and benefits of AA employees through September 30, 2020. In exchange for the financial assistance, AA agreed to certain conditions, including maintaining minimum levels of service to certain airports, implementing cost-saving measures, and not engaging in layoffs or furloughs until October 1, 2020.

What are the Implications of the AA PSP Agreement?

The AA PSP agreement has significant implications for the airline, its employees, and its customers. For American Airlines, the financial aid provided by the government has helped the airline avoid bankruptcy and maintain operations during the pandemic. However, the agreement also requires the airline to make certain commitments, such as maintaining minimum service levels, that may limit its flexibility and profitability.

For AA employees, the PSP agreement has provided some job security and financial stability during a difficult time. However, with the agreement set to expire on September 30, 2020, the future of many AA jobs is uncertain. The airline has already announced plans to cut 19,000 jobs in October if it does not receive additional government aid or concessions from its unions.

For customers, the PSP agreement has helped to ensure that American Airlines continues to operate during the pandemic, although service levels may be lower than usual due to reduced demand and capacity. Customers who have booked flights with AA should be aware of the airline`s policies regarding refunds, cancellations, and rebooking, which may be affected by the PSP agreement and other factors related to the pandemic.


The AA PSP agreement is a crucial component of the airline`s response to the COVID-19 pandemic, providing much-needed financial support while also imposing certain conditions and limitations. As the agreement`s expiration date approaches, the airline, its employees, and its customers are all facing uncertainty and challenges. However, with ongoing negotiations between the government, the airline, and its unions, there is hope that a viable solution can be found that will help American Airlines and its stakeholders navigate this difficult time.