Canadian Airline Buyout Could Reach $9 Billion, CBC Report Says

Canadian Airline Buyout Could Reach $9 Billion, CBC Report Says

March 4, 2021 Jim Byers

The CBC says Ottawa is “in the final stages” of talks with Canadian airlines, and that the final support package could reach a staggering $9 billion.

The network says it sources say that most of the Canadian airlines are asking for financial help from the Trudeau government, likely in the form of loans, but that WestJet would like to see the ruling Liberal party prioritize a plan to safely restart air travel across the country.

“I think the sticking point is money,” said Jerry Dias, national president of Unifor, which represents about 15,000 workers in the airline industry. “The loan, the interest on the loan.”

Dias told the CBC that talks between Ottawa and Canada’s airline sector originally focused on the prospect of a $7 billion loan to be repaid at 1 per cent interest over 10 years. But he said it’s possible the deal could reach $9 billion.

Dias told the Toronto Star on Wednesday that he’s spoken with Air Canada CEO Michael Rousseau and government officials involved in the talks. He said Canada’s largest airline has agreed to Ottawa’s demand that it repay customers who weren’t reimbursed for flights that were cancelled due to the COVID-19 pandemic.

Canadian Travel News yesterday ran a story quoting the Star’s report. But a spokesman for Air Canada today said nothing has changed.

“There is no update since the Feb. 12 (Air Canada annual) earnings release,” spokesman Peter Fitzpatrick said in an email. “You can read that release here. It clearly says discussions are ongoing and that is still the case.

“There is nothing new since we issued this release,” he said.

Former Air Canada President and CEO Calin Rovinescu said in February that he was optimistic that a federal financial package would be worked out. He also said he has no issue with the government requiring refunds be paid out as part of that package.

“I know that they’re very close,” Dias told the Star. “Based on the conversations I’ve had with the government and industry, I had already expected an announcement by now.”

Fitzpatrick told the paper that Air Canada is encouraged by the constructive nature of recent talks.

Government officials said any financial assistance package offered will require that Canadian airlines provide refunds to customers who had flights cancelled because of the pandemic. They also insist that important routes but by Canadian airlines be restored.