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Economic recovery: Air Canada withdraws from its aid plan with Ottawa

Economic recovery: Air Canada withdraws from its aid plan with Ottawa

While Air Canada reached an agreement with the federal government last April to access $5.879 billion in aid, the airline announced Friday that it is withdrawing financial support from Ottawa due to an improving cash flow situation.

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The subsidy agreement between Air Canada and the government, under the emergency credit for large employers, provided access to interest-bearing loans of up to $5.375 billion in addition to $500 million in equity offerings, totaling $5,875. billion in cash.

So far, Air Canada has used only the facility intended to compensate customers for non-refundable tickets, while all other facilities totaling $3.975 billion have remained unused.

Air Canada’s recovery from COVID-19 continues. “We are recalling employees, adding new links to our network, upgrading frequencies, restoring services, and, in the last quarter, closed $7.1 billion in funding,” said Michael Russo, president and CEO, in a press release.

According to Air Canada, these financing transactions provided significant liquidity to Air Canada and resulted in debt maturities being deferred until nearly the end of the decade.

When releasing third-quarter results on November 2, 2021, Air Canada said that as of September 30, 2021, unrestricted cash was approximately $14.4 billion.

Also, although it was negative of $67 million, EBITDA was an improvement, compared to a negative result of $554 million for the third quarter of 2020, an increase of $487 million. .

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