Ottawa is preparing a bailout package for airlines: report

Following a week of eye-popping headlines pertaining to the travel industry, a new report from the Globe and Mail is now claiming that the Canadian government is preparing a bailout package for Canada's struggling airlines. 

The revelation comes nearly one week after Intergovernmental Affairs Minister Dominic Leblanc suggested that the Canadian government was considering taking a stake in airlines like WestJet and Air Canada as Ottawa figures out a way to help the aviation sector amid the COVID-19 pandemic.

This latest scenario being different, a bailout package would indeed help Canada's airlines stay afloat as COVID-19 continues to batter the travel industry, and bring Canada up to speed with other countries around the world that have received government bailouts.

It's a rather timely (and perhaps expected) piece of news, too, given WestJet's recent decision to refund passengers for cancelled flights for any fare, including basic fares, as a result of the pandemic.

A "targeted bailout package"

The Globe says the Liberal cabinet is "deliberating a targeted bailout package" for airlines that includes offers of low interest loans and rollbacks of airport fee increases to help it cope with lost business due to the coronavirus crisis. 

"The package of options that cabinet is reviewing recognizes that air travel is essential to the Canadian economy, and could come in the November economic statement or the next federal budget, expected in February or March," a senior government official was quoted as saying.

The Globe does not identify the multiple sources it spoke with as government officials are not authorized to discuss cabinet deliberations.

The story goes on to say that Ottawa is planning to make their bailout package conditional on two requirements: that public money cannot be used to pay air executives and that carriers may be asked to restart flights on routes that have been closed amid the pandemic. 

Calls for help

A bailout package may come as welcome news to the 250 aviation and travel industry workers that marched on Parliament Hill in Ottawa this week, demanding concrete measures from the Canadian government for a safe reopening of air travel. 

With sector-specific support being one of their key demands, the group took aim at government officials for dragging their feet (for lack of better words) in introducing ways to save Canadian aviation during the coronavirus crisis. 

"The situation is critical,"  Gilles Hudicourt, a co-organizer of the march and pilot at Air Transat, told PAX at the march. “Airlines cannot survive this train. We will lose our jobs, we will lose our homes if nothing is done.”

What Ottawa has been saying

Up until now, Canada’s Prime Minister Justin Trudeau and Finance Minister  Chrystia Freeland have been somewhat vague in explaining their plans to introduce sector-specific support for aviation. 

“We are obviously aware of the particular challenges that the travel sector, the airlines are facing right now,” Freeland told reporters this week when asked if whether or not Canada would introduce an aid package. “It’s definitely an issue we are looking at closely and working on.”

Both Trudeau and Freeland have both pointed out how Canada's airlines have utilized more than $1 billion (US$763 million) of financial assistance courtesy of the wage subsidy program. 

Freeland also has urged airlines to use the government’s loan program for large employers, otherwise called the Large Employer Emergency Financing Facility (LEEFF). 

Prime Minister Trudeau also suggested this week that more help for the airline industry may be coming. 

“It has been significant and important to keep these airlines going,” said Trudeau on Oct. 21. “We recognize how challenging this pandemic is on travel and our aerospace industry in general. That is why we’re looking for more ways to support workers, innovators and businesses affected by this COVID-19 pandemic.”

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