Lethbridge Herald

Airlines reject idea of government stake

Candian carriers want loans to help them stay aloft

- Christophe­r Reynolds THE CANADIAN PRESS

Regional airlines are demanding immediate action from Ottawa to prop up the beleaguere­d sector, but reject the idea of a federal stake in carriers. John McKenna, president of the Air Transport Associatio­n of Canada, says the government has not responded to requests for cash over the past six months, leaving Canada as the only G7 country to hold off on pledging major financial aid for an industry devastated by the COVID-19 pandemic.

“God, no, we don’t need a stake in airlines‚ The cost controls would be incredible,” said McKenna, whose trade organizati­on represents some 30 regional airlines.

“We need liquidity, no interest loans, maybe forgivable loans‚ because fixing is a lot easier than replacing.”

Intergover­nmental Affairs Minister Dominic LeBlanc left the door open to a bailout, including the purchase of airline shares by Ottawa, in an interview with CTV’s Question Period on Sunday.

LeBlanc said Canadians expect stringent conditions on any federal airline funding, such as addressing the issue of travel vouchers, which carriers gave passengers instead of refunds for cancelled flights early in the COVID-19 pandemic.

The United States and some European countries have demanded airlines provide reimbursem­ent while offering them billions in financial aid, with strings attached that include 20 per cent government ownership in the case of Lufthansa and emissionsr­eduction commitment­s from Air France-KLM.

Last week, WestJet Airlines announced it will suspend operations to four cities in Atlantic Canada and slash service to others in the region. Air Canada suspended service on 30 regional routes starting in July, mainly affecting travellers to and from the Maritimes, Quebec and Saskatchew­an.

The two carriers have laid off or furloughed more than 30,000 employees since March as passenger numbers in Canada fell about 90 per cent year over year over the summer, with little improvemen­t since.

Regional airlines are calling for more leadership from Ottawa to coordinate an easing of restrictio­ns, such as the Atlantic travel “bubble” that requires a two-week quarantine for anyone entering the region.

Ultimately, McKenna is hoping rapid testing can take the place of travel barriers, including the two weeks of self-isolation required of new arrivals in Canada.

“The thing they really need to do is to make sure that these quarantine­s are abolished. We have control measures, temperatur­e checks,” he said.

Last week, Prime Minister Justin Trudeau pledged $41 million in emergency funding for northern airlines to ensure services for remote communitie­s.

In 2009, Ottawa contribute­d $13.7 billion to the bailouts of Chrysler Group and General Motors as part of its response to the global financial crisis, and ultimately left taxpayers $3.5 billion short of breaking even on their investment after the government sold off the last of its shares in the auto giants in 2015.

The Canadian Union of Public Employees has said a federal stake in airlines should be a condition of any assistance from Ottawa, on top of significan­t carve-outs to protect the 15,000 flight attendants it represents.

Newspapers in English

Newspapers from Canada