Airlines demand ‘concrete plan’ for financial aid
Firms want quick action on government pledge to support travel sector
Canada’s flight industry is heartened by signals from the throne speech that federal financial help is on the way but wants to see quick, clear action to support the sector, which has been devastated by the COVID-19 pandemic.
The government’s speech from the throne pledged “further support for industries that have been the hardest hit, including travel and tourism.”
The National Airlines Council of Canada says federal authorities need to “immediately come forward with a coherent and concrete plan to support the industry and allow its recovery.” Passenger numbers are down 94 per cent from 2019, “with aviation still at Stage 0 in its recovery” amid ongoing travel restrictions, said the trade group, which represents Air Canada, Westjet Airlines Ltd., Air Transat and Jazz Aviation.
The former three alone have temporarily laid off more than 27,000 employees since March. Nav Canada, which runs the country’s air navigation system, announced earlier this week it has cut 720 jobs or 14 per cent of its workforce due to the plunge in global air traffic.
Canadian airline revenues in 2020 will fall by $14.6 billion or 43 per cent from last year, according to estimates in May from the International Air Transport Association.
“The financial situation is much worse now than it was in the spring, as airports continue to pile up costs and debt to provide enhanced safety and health measures on limited revenues,” Canadian Airports Council president Daniel-robert Gooch said in a statement.
“The speech from the throne offered some hope in recognizing particularly hard hit sectors, including aviation, but time is of the essence: without action, the damage done to airports and the communities they serve may take years to repair.”
Unlike countries including France, Germany and the United States, Canada has held off on sector-specific support for carriers, instead rolling out financial aid available to many industries, such as wage subsidies and loans starting at $60 million for large firms. The governing Liberals pledged in the throne speech “to support regional routes for airlines” in particular. But the address, which outlines the government’s priorities for the new session of Parliament, made no explicit mention of larger carriers.
The broader travel and tourism industry found more encouragement in the words.
The Tourism Industry Association of Canada said it was “thrilled” that Prime Minister Justin Trudeau’s government had circled the sector as a priority in the wake of hundreds of thousands of layoffs across the country.
“In fact, travel and tourism were among the only industries directly mentioned in the speech as a sector in need of further support,” the association said in statement.
Other measures applicable to all industries include the extension of the federal wage subsidy through the summer of 2021 and enhancements to the Canada Emergency Business Account and the Business Credit Availability Program.
Suzanne Benoît, CEO of Aéro Montréal, which represents Quebec’s aerospace cluster, called the wage subsidy extension “excellent” in the short term but said the Liberal government needs to be “more specific” with how it will steady industry turbulence.