A victory for Canadian "aviation"

[Heliian]

Air Canada got their bailout.

Where's the party? The flag waving and congratulations?

People were screaming and screaming for "sector specific" aid. There you go, is it enough?

[RRJetPilot]

It got a loan with many conditions unlike other countries. Liberal incompetence shown again.

[Hot Wings]

It got a loan with many conditions unlike other countries. Liberal incompetence shown again.

Dammed if you do, dammed if you don’t.

[C-GGGQ]

It got a loan with many conditions unlike other countries. Liberal incompetence shown again.

Dammed if you do, dammed if you don’t.

I think the point is, they didn’t.

[“”Bob””]

Likely most of the loans forgiven and probably at negative interest rates.

378 million in share buybacks the year before the pandemic, billions in the bank, and lots of customer cash for flights never flown, and millions in CEWS, and still layoffs and cutbacks.

Your tax dollars at work. Mapleflot was never such a deserved title as it is now.

[schnitzel2k3]

They should've just spent that money and bought 100% of Air Transat and have a nationalized airline.

So apparently talks are happening with Westjet but mum on AT.

Very interesting.

Considering share value dropped today, seems like the investors aren't happy with the government buying 10% of AC.

[Cavalier44]

Air Canada got their bailout.

Where's the party? The flag waving and congratulations?

People were screaming and screaming for "sector specific" aid. There you go, is it enough?

Sorry, I didn't realize Air Canada was the entire aviation sector.

Within a month after the pandemic began (April 2020), the US had an aid package available for their entire industry. Since then, there have been multiple tranches of additional financial aid. Yet here in Canada, it took us a year to conclude an aid package for a single airline. This government's insistence on crafting a tailor-made package for each airline rather than going for a simpler, one-size-fits-all approach, has caused the entire process to be unnecessarily delayed. Coupled with their insistence that airlines fall in line with the government's odious requirements in order to receive said aid (resuming service on unprofitable regional routes, meeting specific carbon emissions targets, etc.), it's clear why negotiations have been so drawn out - the government is less concerned about assisting the industry and its workers than it is concerned about fulfilling a specific political agenda.

With the government set to take an equity stake in Air Canada, what message does that send to WestJet, Sunwing, Transat, etc.? Is the government going to take an equity stake in every airline to which it gives financial aid? What about the airlines who already took the LEEFF aid package at much higher interest rates? Are they now to compete with partially government-owned airlines which have access to an objectively better credit facility going forward? Perhaps unsurprisingly, this entire process has been disastrously mismanaged. Watching Omar and Chrystia field softball questions from the media last night and then still sidestep the "tough" questions was an embarrassing moment for our country and our industry.

On the topic of flag-waving and congratulations, since the Liberal government is so concerned about supporting the industry and Canadian aviation workers, where are there guarantees that Air Canada will re-hire its laid-off/furloughed staff? I see caps on executive compensation, guarantees to resume regional service, etc. - but not much in the way of concrete support for the thousands of employees that Air Canada has laid off since the beginning of the pandemic. This gov't loves to trot out the +$2 billion that they've spent on CEWS since the beginning of that program, yet they conveniently neglect to mention that Air Canada, whom they're now bailing out, pulled out of the program months ago.

Why no assurance that Air Canada will return its staff to employment via the CEWS as part of the conditions for the bailout package, like in the US, where airlines were compelled to either delay layoffs or re-hire as part of their bailout package? I'm hopeful that this aid package will allow Air Canada to remain viable in the short term, but for the 600 pilots, more than 5,000 flight attendants, not to mention nearly 15,000 other employees who are now out of work, this "aid package" doesn't amount to much.

So to answer your question: "Is it enough?" No - not by a long shot.

[Cavalier44]

Double post - please delete.

[redbusdriver]

i think its a good deal for ac. we now have the money we need to keep going and then some. we keep some or most of the marketshare we had before in canada. as for shares in ac, i think its good, especially for the taxpayers. the gov't did the same with gm and chrysler, sold those shares years later at a profit. same will happen again, not only will the taxpayer get the load back plus interest, but whatever profit when the govt sells those shares. there wont be any govt on the director board, and as a 10% shareholder, lil to no influence. only downside is no strings to get furloughed employees back. but i am sure with the firm orders for 220 and 37 and vaccinations we'll all be back before end of year.

[simply_no_one]

Air Canada got their bailout.

Where's the party? The flag waving and congratulations?

People were screaming and screaming for "sector specific" aid. There you go, is it enough?

No it's not enough because it did nothing for the 25,000 laid off employees.

[simply_no_one]

They should've just spent that money and bought 100% of Air Transat and have a nationalized airline.

So apparently talks are happening with Westjet but mum on AT.

Very interesting.

Considering share value dropped today, seems like the investors aren't happy with the government buying 10% of AC.

Where you reading 10%. It's 4-5% IIRC.

[rookiepilot]

Air Canada got their bailout.

Where's the party? The flag waving and congratulations?

People were screaming and screaming for "sector specific" aid. There you go, is it enough?

No it's not enough because it did nothing for the 25,000 laid off employees.

Sure the C-Suite is partying. New bonus packages, anyone?

[YYZSaabGuy]

Sure the C-Suite is partying. New bonus packages, anyone?

https://www.cbc.ca/news/politics/air-ca ... -1.5984543

In exchange for federal government support, Air Canada has agreed to refund customers who had their flights cancelled last year because of the COVID-19 pandemic.
The airline also has agreed to restore flights on nearly all suspended regional routes, to cap compensation for company executives at $1 million per year, and to suspend share buybacks and the payment of dividends to shareholders during the loan period.
In addition, Air Canada said it would to maintain its workforce at current levels, respect collective bargaining agreements and protect workers' pensions. The company currently has 14,859 active Canadian employees, although it employed over 38,000 employees before lost revenue caused it to lay off tens of thousands of workers.
"Taxpayers aren't footing the bill. This is a loan facility, and the government of Canada fully expects to be paid back," said Freeland.

[schnitzel2k3]

They should've just spent that money and bought 100% of Air Transat and have a nationalized airline.

So apparently talks are happening with Westjet but mum on AT.

Very interesting.

Considering share value dropped today, seems like the investors aren't happy with the government buying 10% of AC.

Where you reading 10%. It's 4-5% IIRC.

Beauty, thanks!

[YYZSaabGuy]

Where you reading 10%. It's 4-5% IIRC.

Current issued and outstanding shares totals 334.71 million. The aid package involves the purchase of 21,570,971 newly-issued shares, or 6.4% of the current share count, along with 14.6 million share warrants, of which 50% vest at close. If the warrants are ultimately exercised, the combination of newly-issued shares plus warrants totals 36,170,971 new shares, or 10.8% of the current share count.

[PitchLink]

A tactical move by the feds to hook a couple claws in. They know restrictions are going to continue for quite some time and want the airline back. Only time will tell....

[goingnowherefast]

AC now has a competitive advantage over WJ and the others domestically. Nothing at all involved ensuring AC could continue to compete internationally. Aren't they supposed to be an international airline? We make fun of Americans for ignoring the outside world, but soon the only way to travel internationally will be to connect through JFK, LAX or fly on a non-North American airline. Not that there's anything wrong with foreign airlines, but we're supposed to support local and I kinda like it when my friends have jobs.