After several months of negotiations, Ottawa announced Monday evening that it had reached a series of agreements with the airline, Air Canada, that would allow it to access new liquidity of $ 5.879 billion.
Air Canada said in a statement that “debt and equity financing” will be delivered through the Large Employers Contingent Credit (CUGE).
In particular, these measures will allow the possibility of reimbursement, according to the initial payment method, for customers whose trips have been canceled due to the COVID-19 pandemic. This service will be available from Tuesday.
The thorny issue of paying for canceled flights, rather than simply granting travel credit for another flight, has been at the heart of the dispute between Ottawa and airlines since the start of the pandemic. The Trudeau government has repeatedly stressed that it requires companies to pay back tickets for travelers whose flights have been canceled, a condition for implementing an aid program.
Access to the Air Canada network will again be allowed in most regional communities as service has been suspended due to the health crisis. The airline has also committed to restricting some expenses, particularly in terms of bonuses for its top executives.
The President said: “This program provides us with the additional liquidity that we may need to rebuild our business for the benefit of all stakeholders and continue to contribute significantly to the Canadian economy during the recovery and in the long term.” CEO Michael Russo, who welcomed the acceleration of vaccination against COVID-19.
At the request of Ottawa, jobs, pensions and collective agreements will be protected within the company and Air Canada will continue to be a customer of the Canadian aviation industry. It is above all a decision that will be good for the country, and we believe it is on the side of the government.
“It is important to protect Canadian customers. Our priority is to ensure the competitiveness of the Canadian airline industry and Canadian airlines, and protect thousands of quality jobs in the industry.” Said Deputy Prime Minister and Finance Minister Chrystia Freeland, “This is what today’s announcement with Air Canada represents.”
“After months of devastation, mass layoffs, the cancellation of regional roads and the future of the industry at a standstill, the light at the end of a long and dark tunnel,” the International Federation of Machinery and Space Workers (IAMAW) Region 140 cheered Director General and Head of the Transportation Sector, Fred Hospice.
We have worked hard to get our members back to work and help them out of the pandemic. Over 50% of Air Canada’s members have been laid off, and the resumption of regional services will provide opportunities for re-employment. “
Finally, Air Canada will have to complete the acquisition of 33 Airbus A220 aircraft built at Mirabel. An order for 40 Boeing 737 MAX jets has also been placed.
Michael Sabia, former head of the Quebec Development and Placement Fund and deputy finance minister in Ottawa since December, was in charge of the file, as were Minister Freeland and Transport Minister Omar Ghubra.
It is estimated that prior to this comprehensive announcement, $ 2.1 billion was returned to airline workers through wage subsidies, due to the pandemic. This sector also contributes to maintaining approximately 235,000 jobs across Canada.