Porter to get $135M in funding from federal government
The federal government will provide Toronto-based Porter Airlines with $135 million in commercial financing during the coronavirus pandemic that has grounded most air traffic and strained the global air travel industry.
Porter Airlines told the Financial Post Friday that it arranged commercial financing with Export Development Canada secured by a portion of its fleet of 29 aircraft.
The regional carrier, which operates from an island in Toronto Harbour, owns all of its aircraft and only has debt on three, according to an emailed statement.
“With this strong balance sheet, we secured a loan similar to other arrangements previously made with EDC,” an airlines spokesperson said.
“Many companies are making financially prudent plans in the current environment and this additional capital provides flexibility for our business. Porter has the financial resources to sustain the airline through this public health crisis.”
Porter halted all of its operations on March 20 with plans to keep its planes grounded until June 1.
It waived change and cancellation fees for customers who had to make last-minute travel arrangements.
At the time, chief executive Michael Deluce called the speed of COVID-19 related developments “shocking.”
“It is having an unprecedented impact around the globe on businesses, economies and people,” Deluce said in a statement, adding that Porter supports government efforts to restrict the spread of the disease.
Over the past few weeks, the federal government has met with representatives from Canada’s airline industry, including calls between Prime Minister Justin Trudeau and the CEOs of Air Canada and WestJet Airlines Ltd., the country’s two largest carriers.
The industry has called for government support as demand for air travel plummets to near zero thanks to travel restrictions in place to quell the spread of the virus. It’s not yet clear exactly how Ottawa will support the wider industry, but requests for help got louder after the government banned non-essential travel to the United States.
Canada’s major carriers have already laid off thousands of employees.
WestJet laid off 6,900 employees, Air Canada 5,149 and Transat A.T. 3,600 people.
The International Air Transport Association estimates that global airlines will collectively lose more than $252 billion in revenue due to the drastic drop in travel.
It is having an unprecedented impact around the globe on businesses, economies and people.