By Canadian Press

Air Canada, Ottawa agree to aid package worth up to $5.9 billion

Apr 12, 2021 | 5:40 PM

OTTAWA — Air Canada and Ottawa have agreed to financing deals that would allow the airline to access as much as $5.9 billion through the Large Employer Emergency Financing Facility program.

As part of the package, Air Canada has agreed to a number of commitments, including refunds for some customers who did not travel due to COVID-19 and a promise to resume service at some regional airports.

Other restrictions include limits on executive compensation and maintaining a minimum number of staff.

Travel restrictions introduced through the beginning of the pandemic have been catastrophic for the airline industry. 

Then-CEO Calin Rovinescu described it as the “bleakest year in the history of commercial aviation,” when the airline released its 2020 financial results in February.

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The deal with Ottawa includes debt as well as an equity investment.

The company lost $4.6-billion in 2020, compared with a profit of $1.5 billion the year before.

In early April, Air Canada pulled the plug on its planned $190-million takeover of Montreal-based tour operator Transat AT, citing Europe’s unwillingness to approve the deal, thus triggering a $12.5-million termination fee.

Organizations supporting Air Canada’s calls for a bailout have included unions such as Unifor and the Canadian Air Traffic Control Association, as well as the National Airlines Council of Canada industry group.

This report by The Canadian Press was first published April 12, 2021.

Companies in this story: (TSX:AC)

The Canadian Press