Airline unions call for $7B in loans for ailing industry

Labour leaders are calling on Ottawa to provide immediate financial aid and rapid viral testing to an airline industry devastated by the COVID-19 pandemic.

The heads of two pilots’ unions and Unifor asked the federal government on Thursday to offer carriers loans totalling $7 billion at a one per cent interest rate.

The 10-year credit plan being requested includes loan guarantees and direct financial aid, but no grants and aligns with the support extended by other countries, they said.

The unions also asked Ottawa to back approval and deployment of rapid COVID-19 tests for passengers as a step toward easing travel restrictions and quarantine rules.

“The COVID-19 pandemic has created a crisis in Canada’s aviation industry unlike anything seen before, and recovery may be years away,” Tim Perry, head of the Air Line Pilots Association’s Canadian branch, said at a news conference in Toronto.

“Make no mistake, decimating this industry today will impede the recovery for Canadians tomorrow and beyond,” said Robert Giguere, head of the Air Canada Pilots Association.

Labour groups differed on the best approach to a bailout.

The Canadian Union of Public Employees, which was not a part of the media event Thursday, said any government support should include “significant carve-outs for supporting workers, rather than protecting only corporate bottom lines.”

CUPE, which represents 15,000 flight attendants, also said a government stake in the companies should be a condition of any federal assistance, with parallels to Germany’s $14-billion bailout of Lufthansa that saw the government take a 20 per cent share of the airline.

However, Unifor president Jerry Dias said a government stake should only come into consideration if an airline defaults on a loan.

Governments across the globe have doled out $123 billion to assist the airline industry, Dias said. Canada, on the other hand, has steered clear of sector-specific support, instead rolling out financial aid such as wage subsidies available to many industries.

Ottawa has also held off on requiring airlines to refund customers whose flights were cancelled due to the pandemic, potentially saving carriers hundreds of millions of dollars. In contrast, European and U.S. authorities have demanded airlines reimburse travellers, on top of the strings attached to financial lifelines that range from limiting dividends and executive bonuses to cutting carbon emissions and carving out ownership stakes for government.

Travel restrictions and dried-up demand continue to take a toll on the airline and tourism industries. More than 30,000 employees have been laid off or furloughed at Air Canada and WestJet Airlines Ltd. Passenger numbers in Canada were down 90 per cent year over year in July, though the 845,000 travellers made up nearly twice the number of the previous month, according to Statistics Canada.