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According to a statement from Air Canada, Canada's largest air carrier, these funds will help it cope with the effects of the COVID-19 pandemic. The aid package consists of loans totaling $3.2 billion, with the government buying a six per cent stake in the airline for $398 million.
The government has also received the right to buy back a total of 14 million additional shares over ten years at the current price of $27 per share. In exchange, Air Canada has made a number of commitments, including compensating those passengers who have purchased non-refundable tickets but have never used them since February 2020.
The airline is also pledging to limit costs, halt dividend payments, suspend staff layoffs and resume service to all regions of the country where air travel has been suspended due to the pandemic.
The European Commission recently concluded a similar bailout agreement with Air France-KLM. The French authorities have agreed to invest €4 billion in the carrier, of which €3 billion will be in loans and the rest - in investments through the acquisition of shares in the airline.
source: bloomberg.com
The government has also received the right to buy back a total of 14 million additional shares over ten years at the current price of $27 per share. In exchange, Air Canada has made a number of commitments, including compensating those passengers who have purchased non-refundable tickets but have never used them since February 2020.
The airline is also pledging to limit costs, halt dividend payments, suspend staff layoffs and resume service to all regions of the country where air travel has been suspended due to the pandemic.
The European Commission recently concluded a similar bailout agreement with Air France-KLM. The French authorities have agreed to invest €4 billion in the carrier, of which €3 billion will be in loans and the rest - in investments through the acquisition of shares in the airline.
source: bloomberg.com
