WASHINGTON, April 20 (Reuters) - The U.S. Treasury Department said on Monday it has disbursed $2.9 billion in initial payroll assistance to 54 smaller passenger carrier and two major passenger airlines, while it finalized grant agreements with six major airlines.

The Treasury is initially giving major airlines 50% of funds awarded and releasing the remainder in a series of payments. In total, Treasury is awarding U.S. passenger airlines $25 billion in funds earmarked for payroll costs. Airlines must repay 30% of the funds in low-interest loans and grant Treasury warrants equal to 10% of the loan amount.

Treasury said Monday it has finalized grant agreements with Allegiant Air, American Airlines, Delta Air Lines , Southwest Airlines, Spirit Airlines, and United Airlines.

Air carriers have been devastated by the coronavirus pandemic and seen U.S. travel demand fall by 95%. (Reporting by David Shepardson)