The federal government of Canada approved a million-dollar support plan for Air Canada, the country’s largest airline, to resume flight after losing 73 percent of its passengers in the last year and laying off more than half of its labour force.
The agreement, for about 4.7 billion dollars, will be a point of support for the main airline in the country that operates flights to more than 20 destinations in Latin America and the Caribbean.
In 2020, Air Canada posted losses of $4.6 billion, so this economic injection could give the airline wings. Air Canada had already raised $ 554 million in 2020 through the federal Emergency Wage Subsidy Program. It is expected that throughout 2021 it will continue to receive this aid.
It should be remembered that at the beginning of the year, the government of Justin Trudeau announced that flights from Canada to Mexico and the Caribbean were suspended. The measure came into effect on January 31 and was another of the restrictions applied by the authorities to prevent a spread of Covid-19.
In his virtual press conference, Trudeau said that “with the challenges we face right now, both here and abroad, we have come to the conclusion that this is not the time to travel,” Trudeau said at the time, prior to the announcement of The measure had several days asking Canadians to suspend all scheduled travel.
Chrystia Freeland, Canada’s Finance Minister, told a press conference in Toronto that it was very important to have a “good and fair” agreement for Canadians and their government.
Economical crash
Over the past 13 months, Air Canada has had to lay off about 20,000 employees and cut an additional 1,700 people in February.
Michael Rousseau, president and CEO of the company, stated in a press release that “when the pandemic struck more than a year ago, Air Canada had, given its size, one of the strongest balance sheets in the global airline industry.”
For Rousseau, the relief plan provides above all the additional liquidity that the company might need “for the benefit of all stakeholders and in order to continue to contribute significantly to the Canadian economy during the recovery and in the long term.”
Michael Sabia, Federal Deputy Minister of Finance, was in charge of negotiating with Air Canada this aid plan for $ 5.9 billion. Some 4,000 million are available to the airline through four lines of credit. Ottawa injects 500 million in shares of the company (23.18 dollars for each title) and the remaining 1,400 million consist of a fund – also in credit facilities – for the reimbursement of tickets cancelled by the pandemic as of February 2020.
One of the conditions imposed by Ottawa for the approval of this financial support plan was precisely the refund of canceled tickets. Also, Air Canada will be required to maintain an employment rate that is not lower than that recorded on April 1, 2021.
By Silvia Méndez
