Air Canada has entered into an agreement with the Government of Canada that will allow the carrier to access up to $5.879 billion.
"Air Canada entered the pandemic more than a year ago with one of the global airline industry's strongest balance sheets relative to its size.
We have since raised an additional $6.8 billion in liquidity from our own resources to sustain us through the pandemic, as air traffic ground to a virtual halt in Canada and internationally," said Michael Rousseau, President and Chief Executive Officer of Air Canada.
The Financial deal features fully repayable loans that Air Canada would only use as required, as well as an equity investment.
As part of the financial package, Air Canada has agreed to a number of concessions related to customer refunds (which has been a major sore point for many Canadians whose flights were cancelled by the airline during COVID), resuming service to regional communities, restrictions on the use of the funds provided, employment and capital expenditures.
► Passenger Refunds - Beginning April 13, 2021, offering eligible customers who purchased non-refundable fares but did not travel due to COVID-19 since February 2020, the option of a refund to the original form of payment. In support of its travel agency partners, Air Canada will not retract agency sales commissions on refunded fares;
► Regional connectivity - The resumption of service or access to Air Canada's network for nearly all regional communities where service was suspended because of COVID-19's impact on travel, through direct services or new interline agreements with third party regional carriers;
► Restrictions - Restricting certain expenditures, and restricting dividends, share buybacks and senior executive compensation;
► Employment - Obligations to maintain employment at levels which are no lower than those at April 1, 2021;
► Maintain the Aircraft Order - The completion of the airline's acquisition of 33 Airbus A220 aircraft, manufactured at Airbus' Mirabel, Quebec facility. Air Canada has also agreed to complete its existing firm order of 40 Boeing 737 Max aircraft. Completion of these orders remains subject to the terms and conditions of the applicable purchase agreements.
After the Financial Aid was declared , WestJet came out with its statement owing to it's previous discussions with Canadian government for a Long term solution.
"The WestJet Group continues to operate self-sufficiently with the exception of the Canada Emergency Wage Subsidy (CEWS), which flows through directly to our employees.
We have already communicated we will restore service to all 42 airports that we served pre-COVID and did so at our earliest opportunity. Since October 2020, WestJet’s refund policy has been industry-leading in Canada, and consistent with the U.S., UK and EU."
"We remain committed to building back even stronger for the betterment of all Canadians. A healthy WestJet will help lead a stronger recovery, increasing competition and consumer choice while lowering the cost of travel for Canadians, all while anchoring Canada’s vital air travel and tourism sectors."
"The WestJet Group of Companies continues discussions with the Government of Canada on a safe travel-restart framework. We remain focused on a long-term solution that will serve the best interests of Canadians."
"We will provide updates on our discussions with the Government of Canada at the appropriate time."
