Canada’s aviation industry is in talks to obtain at least $ 7 billion in loans from the federal government once airlines can reimburse passengers whose flights have been postponed or canceled due to the COVID-19 pandemic, according to the chief of the largest union Country.
Unifor President Jerry Dias said in an interview Thursday that the government is negotiating with airlines, including Air Canada, over the structuring of the funds, which could come as low-interest loans as opposed to a full bailout.
“Neither the federal government nor Air Canada will approve or deny this because they are negotiating. So I understand the cloak of secrecy at this time. But I’m frustrated. It’s been taking too long,” said Dias.
The reimbursement of passengers whose flights were postponed or canceled was one of Ottawa’s key demands before a decision was made to provide billions of dollars in a rescue package to the ailing aviation sector. Other demands concerned the restoration of regional flights by airlines and the improvement of their financial transparency.
The pandemic hit not only Air Canada badly, but also most of the major airlines in Canada. Air Canada laid off more than half of its 38,000 employees in June as demand for air travel declined due to border restrictions and efforts to reduce the spread of COVID-19. Another 1,700 people were made redundant in January while several regional domestic routes were cut. Other airlines like WestJet Airlines Ltd. Privately owned and Sunwing Airlines Inc. have also announced layoffs and route reductions.
“There is no real playbook for a pandemic,” said Dias. “I think the government has been waiting to see if we can get through this quickly and what the macroeconomic carnage would look like for the industry.”
“We are at a crucial stage and decisions have to be made and they have to be made now.”
An Air Canada spokesman declined to comment on whether the airline has agreed to reimburse affected passengers, but cited a February 12 press release that stated the company is continuing to negotiate with federal officials. A representative from Transport Canada was not immediately available to comment.
A Treasury Department spokesman said in an email to BNN Bloomberg the government was determined to support the aviation sector during the pandemic.
“The government is in discussions with airlines about possible additional financial support. Any further taxpayer support will be a priority: refunding Canadians for canceled flights, maintaining and restoring regional routes in Canada, and protecting jobs across the aviation sector. We emphasize this continue in our ongoing discussions with airlines, “said the spokesman.