Government aid is comming for the airlines

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boeingboy
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Government aid is comming for the airlines

Post by boeingboy »

It's about time!

https://nationalpost.com/news/economy/c ... oplay=true

https://ca.travelpulse.com/news/airline ... oyers.html

The government finally comes through with aid for Canadian airlines!

It's a little light on details but does contain rules on access to the money will place limits on dividends, share buy-backs and executive pay. I agree with that. I don't know about tying it climate change though.
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rudder
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Re: Government aid is comming for the airlines

Post by rudder »

These appear to be conditional non-collateralized loans. Add to that CEWS grants and it would appear that is the sum total of support emanating from YOW. Nothing that is ‘airline’ targeted.

It will be interesting to see who subscribes and what the resulting balance sheet looks like. For some, CCAA may be the preferred or inevitable outcome.
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boeingboy
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Re: Government aid is comming for the airlines

Post by boeingboy »

I agree the devil is in the details - most of which are still forthcoming - but it's better than the cast off and good luck the government has been doing for the last 2 months or so.

It also sounds like (at least from Sunwings view) that it may be based on closed door discussions the airlines and the government have had. It's true it may not help everyone - but it's a start. I'm sure like every other program it will change as time goes on.
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DanWEC
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Re: Government aid is comming for the airlines

Post by DanWEC »

60 Million? Correct me if I'm wrong but how would that have any significant effect for any airline given the burn rate?
It's something, but not much. Especially given it's low interest loan, and given their acceptance criteria, with a low risk of bad debt.
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rudder
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Re: Government aid is comming for the airlines

Post by rudder »

DanWEC wrote: Mon May 11, 2020 12:08 pm 60 Million? Correct me if I'm wrong but how would that have any significant effect for any airline given the burn rate?
It's something, but not much. Especially given it's low interest loan, and given their acceptance criteria, with a low risk of bad debt.
$60 million is the MINIMUM loan.
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DanWEC
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Re: Government aid is comming for the airlines

Post by DanWEC »

After reading the release on the PM's page, it's a bit clearer. Good stuff!
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mbav8r
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Re: Government aid is comming for the airlines

Post by mbav8r »

rudder wrote: Mon May 11, 2020 12:11 pm
DanWEC wrote: Mon May 11, 2020 12:08 pm 60 Million? Correct me if I'm wrong but how would that have any significant effect for any airline given the burn rate?
It's something, but not much. Especially given it's low interest loan, and given their acceptance criteria, with a low risk of bad debt.
$60 million is the MINIMUM loan.
Nope, the loan is up to 60 million, they talk about companies who were trying to get financing of 60 mil or more but in the bullet points it spells it out.

“Expand the Business Credit Availability Program (BCAP) to mid-sized companies with larger financing needs. Support for mid-market businesses will include loans of up to $60 million per company, and guarantees of up to $80 million. Through the BCAP, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will work with private sector lenders to support access to capital for Canadian businesses in all sectors and regions.“

So, 1.7 billion for the oil sector and airlines get a loan for 60 million, 3 days worth of cash burn for AC, I sure hope this is not what they were talking about last week.
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rudder
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Re: Government aid is comming for the airlines

Post by rudder »

mbav8r wrote: Tue May 12, 2020 6:27 am
rudder wrote: Mon May 11, 2020 12:11 pm
DanWEC wrote: Mon May 11, 2020 12:08 pm 60 Million? Correct me if I'm wrong but how would that have any significant effect for any airline given the burn rate?
It's something, but not much. Especially given it's low interest loan, and given their acceptance criteria, with a low risk of bad debt.
$60 million is the MINIMUM loan.
Nope, the loan is up to 60 million, they talk about companies who were trying to get financing of 60 mil or more but in the bullet points it spells it out.

“Expand the Business Credit Availability Program (BCAP) to mid-sized companies with larger financing needs. Support for mid-market businesses will include loans of up to $60 million per company, and guarantees of up to $80 million. Through the BCAP, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will work with private sector lenders to support access to capital for Canadian businesses in all sectors and regions.“

So, 1.7 billion for the oil sector and airlines get a loan for 60 million, 3 days worth of cash burn for AC, I sure hope this is not what they were talking about last week.
Nope. That is the Mid-Market Finance Program. Specifically targeted to business with annual revenue of $100MM but less than $300MM. It is an expansion of the existing BCAP.

LEEFF is a new program with loans starting at a $60MM floor.
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FL320
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Re: Government aid is comming for the airlines

Post by FL320 »

788 millions loan from Export Devlopment Canada to Air Canada (sorry I can’t find it in English)
https://www.tvanouvelles.ca/2020/05/12/ ... r-canada-1
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rudder
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Re: Government aid is comming for the airlines

Post by rudder »

FL320 wrote: Tue May 12, 2020 6:58 am 788 millions loan from Export Devlopment Canada to Air Canada (sorry I can’t find it in English)
https://www.tvanouvelles.ca/2020/05/12/ ... r-canada-1
That is an EDC sourced loan that is collateralized against the A220’s. It is not an LEEFF loan.
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mbav8r
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Re: Government aid is comming for the airlines

Post by mbav8r »

Ok, can’t find that but I’ll take your word for it
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Babar350
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Re: Government aid is comming for the airlines

Post by Babar350 »

Here : https://www.newswire.ca/news-releases/a ... 28130.html
In late April 2020, Air Canada concluded a bridge financing of $788 million for 18 Airbus A220 aircraft which may be used for general corporate purposes and which Air Canada expects to replace with longer-term secured financing arrangements later in 2020 with the same lender.
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rudder
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Re: Government aid is comming for the airlines

Post by rudder »

mbav8r wrote: Tue May 12, 2020 7:02 am Ok, can’t find that but I’ll take your word for it
Here is an article. Not a government source.

https://www.retail-insider.com/retail-i ... on-payroll
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Localizer
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Re: Government aid is comming for the airlines

Post by Localizer »

Correct me if this is wrong, but the news release I read said that corporations would have to exhaust all other sources of financing and be willing to open their books to Ottawa? A bridge loan will hardly help Canadian airlines compete on the world stage against airlines that received an actual bailout.

If you're going to bankrupt the country anyways .. why stop now???
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BigQ
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Re: Government aid is comming for the airlines

Post by BigQ »

Just read something that the current federal government placed a little paragraph at the end of the funding requests to require companies that accept federal funds to submit an annual report detailing how they are cutting their emissions in accordance with the Liberal Carbon Reduction Plan.

If true, that's a nice little piece of extra bureaucracy they inserted there...
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Gilles Hudicourt
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Re: Government aid is comming for the airlines

Post by Gilles Hudicourt »

Good thing I didn’t hold my breath....
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FL320
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Re: Government aid is comming for the airlines

Post by FL320 »

Pitiful. This government is a real shame; hopefully Canada will get real leaders one day...
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Localizer
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Re: Government aid is comming for the airlines

Post by Localizer »

hopefully Canada will get real leaders one day...
Doubt it ... truly intelligent and forward thinking people see the shit stain called politics for what it is .. so they stay away.
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Rowdy
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Re: Government aid is comming for the airlines

Post by Rowdy »

All the more reason to force an election and turf the current disgrace that is our leader and controlling party.
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skypirate88
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Re: Government aid is comming for the airlines

Post by skypirate88 »

Rowdy wrote: Tue Jun 30, 2020 5:16 pm All the more reason to force an election and turf the current disgrace that is our leader and controlling party.
I don't see a point. JT has bought so many votes I doubt he'd be unseated.

If you made at least 5k last year you're potentially eligible for 2k a month from CERB. Who wouldn't vote for more of that?
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