Air Canada to issue refunds after receiving $5.9B deal for federal government aid
Some $1.4 billion of the government loans is earmarked to help reimburse the thousands of customers who paid for tickets.
Canadians are awaiting details on Air Canada’s plans for ticket refunds after the airline reached a deal for $5.9B in federal aid.
As part of the package Air Canada has agreed to refund passengers whose flights were cancelled due to the COVID-19 pandemic, cap executive compensation at $1 million and restore service to regional airports.
Some $1.4 billion of the government loans is earmarked to help reimburse the thousands of customers who paid for tickets but remained in the lurch at the end of 2020.
The package, which will see the federal government pay $500 million for a six-per-cent stake in the country’s biggest airline, also requires the carrier to maintain employment at current levels or higher.
“Taxpayers aren’t footing the bill. This is a loan facility, and the government of Canada fully expects to be paid back,” Finance Minister Chrystia Freeland said on Apr. 12, referring to the $5.4-billion credit facility.
The airline reported it held $2.3 billion in advance ticket sales during the fourth quarter of 2020 while thousands of would-be passengers who had already paid for tickets remained in the lurch.
The company posted a staggering $1.16-billion loss in the fourth quarter of last year, a result that caps off what the carrier’s CEO called the bleakest year in aviation history.
Air Canada has committed to resuming service at 13 regional airports as well as seven others through agreements with regional carriers.