Air Canada has offered an fairness stake to the Canadian authorities and agreed to a sequence of commitments together with refunds to prospects, sustaining jobs and a cap on senior govt compensation in alternate for a multi-billion greenback federal assist package deal.
The nationwide provider mentioned in an announcement on Monday night it might be allowed entry to as much as C$5.89bn ($4.69bn) in liquidity by way of the short-term loans programme arrange by the Trudeau authorities to help massive Canadian employers.
The settlement ends months of negotiations between the federal government and Air Canada over a coronavirus assist package deal, however comes greater than a yr after the US supplied help to its airline industry. Discussions with rival Canadian carriers over comparable potential packages are persevering with, transport minister Omar Alghabra mentioned throughout a press convention.
The package deal consists of a sequence of debt and fairness agreements, together with the federal government taking a C$500m stake within the Toronto-listed provider, which had a market capitalisation of about C$9bn on Monday.
In alternate for the federal government loans, Air Canada has agreed to a number of commitments together with providing refunds to prospects whose tickets had been cancelled because of the pandemic. As much as C$1.4bn within the type of an unsecured credit score facility has been made out there to assist paying these refunds.
The airline mentioned it had additionally agreed to “limiting sure expenditures, and limiting dividends, share buybacks and senior govt compensation.”
Air Canada has additionally dedicated to sustaining “employment at ranges which aren’t decrease than these at April 1, 2021” and agreed to respect collective bargaining agreements and shield staff’ pensions. The corporate has nearly 15,000 energetic workers.
As a part of the package deal circumstances, the airline will resume service, or permit entry to the provider’s community, for practically all regional communities the place routes had been suspended because of the pandemic. The corporate has additionally agreed to finish the previously-planned buy of 33 Airbus A220 plane, manufactured in Quebec, and an present agency order of 40 Boeing 737 Max plane.
Michael Rousseau, chief govt, mentioned the liquidity programme introduced right now supplied “a major layer of insurance coverage” for the airline and would allow it to “higher resolve buyer refunds of non-refundable tickets, preserve our workforce and re-enter regional markets.” The airline had beforehand raised C$6.8bn in liquidity from its personal sources “to maintain us by way of the pandemic”, he mentioned.