Air Canada has just announced that it has reached an agreement with the Government of Canada that will allow the carrier to access up to $ 5.879 billion.
“Air Canada entered the pandemic over a year ago with one of the strongest balance sheets in the global airline industry relative to its size. Since then, we have raised $ 6.8 billion additional cash from our own resources to support us during the pandemic, ”said Michael Rousseau, President and CEO of Air Canada.
“The supplemental liquidity program that we are announcing today achieves several aligned objectives as it provides an important layer of assurance for Air Canada, it allows us to better settle non-refundable ticket refunds to customers, to maintain our workforce. work and re-enter regional markets. Importantly, this program provides additional liquidity, as needed, to rebuild our business for the benefit of all stakeholders and to continue to contribute significantly to the Canadian economy through its recovery and for the long term.
“As vaccine deployments accelerate, we continue to work with the Government of Canada on the evolution of safe and science-based testing and quarantine measures to safely restart our industry. with your friends and family and by taking these long awaited vacations and business trips and we will be ready to safely connect Canadians in Canada and Canada with the rest of the world, ”said Mr. Rousseau.
The deal includes fully repayable loans that Air Canada would use only as needed, as well as an equity investment. As part of the financial package, Air Canada accepted a number of concessions related to customer refunds (which was a major sore point for many Canadians whose flights were canceled by the airline during COVID), the resumption of service to regional communities, restrictions on the use of funds provided, employment and capital expenditure. These include:
- Effective April 13, 2021, offering eligible customers who purchased non-refundable fares but have not traveled due to COVID-19 since February 2020, the option of a refund according to the original payment method. In support of its partner travel agencies, Air Canada will not withdraw agency sales commissions on reimbursed fares;
- Resumption of service or access to the Air Canada network for almost all regional communities where service has been suspended due to the impact of COVID-19 on travel, through direct services or new agreements interline with third party regional carriers;
- Restrict certain expenses and restrict dividends, share buybacks and executive compensation;
- Obligations to maintain employment at levels not lower than those on April 1, 2021; and
- Completion of the airline’s acquisition of 33 Airbus A220 aircraft, manufactured at the Airbus plant in Mirabel, Quebec. Air Canada has also agreed to complete its existing firm order for 40 Boeing 737 Max. The execution of these orders remains subject to the terms and conditions of the applicable purchase contracts.
You can read more detailed information about the offer on the Air Canada website.