Inside Logistics

Big airlines left out of new aid packages

Aid package targeting big players such as Air Canada and WestJet Airlines remains in the works


December 1, 2020
by Christopher Reynolds THE CANADIAN PRESS

Ottawa is rolling out a wave of new funding for pandemic-battered industries including tourism, the arts and regional aviation, with smaller companies top of mind – and large airlines notably absent.

The Liberal government’s fiscal update sketches out a program that will provide low-interest loans of up to $1 million for badly hurt entrepreneurs.

The aid, dubbed the Highly Affected Sectors Credit Availability Program (HASCAP), comes on top of a newly expanded emergency loan program already in place for small businesses, and technically is not limited to certain industries.

Rent relief and nearly $700 million in capital investments are en route to airports over six years. About $206 million in further support is bound for regional aviation, including smaller airlines, via a new “regional air transportation initiative” overseen by development agencies.

But an aid package targeting big players such as Air Canada and WestJet Airlines remains in the works as talks with Ottawa drag on, with the lack of specifics in the fiscal update frustrating industry leaders.

“We had hoped to get a better sense of where the government was going. Instead they repeated the line that they’ve repeated several times over the past several months – that they’re `establishing a process with major airlines regarding financial assistance,’ ” said Mike McNaney, head of the National Airlines Council of Canada.

Countries around the world have given carriers US$173 billion in support, he said. Many have also required airlines to offer refunds for cancelled flights, something Ottawa says will be a condition of any bailout.

“We are very much a global outlier and are ostensibly stuck at Stage Zero on the government planning process,” McNaney – whose industry group represents Air Canada, WestJet, Transat and Jazz Aviation – said in a phone interview.

Regional support

The regional aviation support comes with question marks, as well.

“A regional initiative, what’s that?” asked John McKenna, CEO of the Air Transport Association of Canada, which represents some 30 regional airlines.

“We have no idea. We have not been consulted,” he said in a phone interview. “Never mind new initiatives, try to support the existing services so they survive.”

The $686 million in airport aid includes $500 million over six years, starting this year, to back infrastructure spending at large airports that would include massive transit projects, such as the new light-rail station at the Montreal airport.

The government is also proposing to extend $229 million in additional rent relief to the 21 airport authorities that pay rent to Ottawa, with “comparable treatment” for Ports Toronto, which operates Billy Bishop airport in downtown Toronto.

The supports unveiled Monday come on top of Ottawa’s pan-sectoral announcement to raise the wage subsidy to 75 percent of company payroll costs – it was reduced to a maximum of 65 percent in October – as well as an extension of the rent subsidy to mid-March from the end of 2020.

David Chartrand, Quebec coordinator for the International Association of Machinists and Aerospace Workers, applauded the wage subsidy, but lamented the radio silence on large airlines.

“After almost 10 months of crisis, still nothing,” he said in a release in French.