But why is the bailout in the form of loans? This kind of bailout fails to punish management and owners for failing to keep adequate rainy-day funds. Giving loans as bailout seems to reduce the incentive for keeping rainy-day funds because owners and management would come to count on the government for such bailouts in the future. If instead, the bailout takes the form of equity injections, the owners would see their ownership stake in the airlines diluted, which gives them an incentive to be prudent in order to avoid bailouts. With equity injections, airlines get the cash they need to pay employees, and owners get punished for being imprudent.
Bailouts in other countries such as Singapore have taken the form of equity injections (issuance of shares) and/or the issuance of convertible bonds. What's so special about US airlines?