Air Canada sold a stake in the Canadian government and accepted a series of commitments including refunds to customers, job retention and a cap on executive compensation in exchange for multibillion-dollar federal aid .
The national carrier said in a statement Monday evening that it would be allowed access to cash of up to C $ 5.89 billion ($ 4.69 billion) through the short-term loan program put in place. by the Trudeau government to help large Canadian employers.
The deal ends months of negotiations between the government and Air Canada over a coronavirus aid program, but comes more than a year after the United States offered help to their airline industry. Discussions with rival Canadian carriers over similar potential packages are continuing, Transport Minister Omar Alghabra said at a press conference.
The package is made up of a series of debt and equity deals, including the C $ 500 million equity investment in the Toronto-listed carrier, which had a market capitalization of around C $ 9 billion. Monday.
In exchange for government loans, Air Canada accepted several commitments, including offering refunds to customers whose tickets were canceled due to the pandemic. Up to C $ 1.4 billion in the form of an unsecured credit facility has been made available to support the payment of these repayments.
The airline said it had also agreed to “curtail certain spending and restrict dividends, share buybacks and executive compensation.”
Air Canada is also committed to maintaining “employment at levels not lower than April 1, 2021” and has agreed to respect collective agreements and protect workers’ pensions. The company has nearly 15,000 active employees.
As part of the package conditions, the airline will resume service, or allow access to the carrier’s network, for almost all regional communities where routes had been suspended due to the pandemic. The company also agreed to finalize the previously planned purchase of 33 Airbus A220 aircraft, made in Quebec, and an existing firm order for 40 Boeing 737 Max.
Michael Rousseau, managing director, said the liquidity program announced today provided “a significant layer of insurance” to the airline and would allow it “to better resolve non-refundable ticket refunds to customers, to maintain our hand -work and re-enter regional markets. The airline had previously raised C $ 6.8 billion in cash from its own resources “to support us during the pandemic,” he said.