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Groups representing the airline industry say they are disappointed that the federal government’s economic upgrade has failed to offer the sector – hard hit by the pandemic – new aid to help it survive the crisis.
The federal government said it is ready to spend $ 980 million on aid and subsidies for leasing Canadian airports. However, it did not explain how it intends to help air carriers struggling with a drop in demand of up to 90% that has resulted in the cancellation of dozens of regional routes and the sacking or layoff of thousands of workers.
Mike McNaney, president and CEO of the National Airlines Council of Canada, represents the country’s major carriers, including Air Canada, West Jet and Air Transat.
“While other countries around the world moved months ago to provide sectoral support, we remain a global outlier and are apparently stuck in the zero phase of the government planning process,” McNaney said.
“We have to move. We have to move forward on this.”
The tax update says that since the start of the pandemic, airlines have received more than $ 1.4 billion in support through the wage subsidy. The update also says the government is now “establishing a process with major airlines regarding financial assistance” that is conditional on Canadians reimbursing flights canceled due to COVID-19.
More than 100,000 Canadians have joined petitions calling on the government to take action to force airlines to reimburse passengers for canceled flights, and several lawsuits have also been filed.
Finance Minister and Deputy Prime Minister Chrystia Freeland said $ 1.2 billion is in today’s economic budget for airports, airport infrastructure and regional airlines. He said detailed talks are underway with major airlines for more support.
“To know exactly how to support them, we need to really see what their financial position is,” Freeland told CBC political correspondent Rosemary Barton.
CBC chief political correspondent Rosemary Barton spoke with Freeland about what the plan is for airlines under pressure from COVID-19. 1:31
$ 206 million to help regional air travel
The tax upgrade proposed $ 206 million over two years to help regional airlines create a new “Regional Air Transport Initiative”.
“It doesn’t start to cover what needs to be done,” John McKenna, president of the Air Transport Association of Canada, told CBC News. “We are very disappointed again.
“This government doesn’t get our industry. They don’t understand what trouble we’re in.”
McKenna’s organization represents about 35 large and small airlines, including Porter, which has founded his entire operation– Sunwing leisure carrier and more than a dozen regional operators serving rural and remote communities.
McKenna said his organization has not been consulted and he is not clear exactly what this regional initiative is.
“Our industry has been working for over eight months with 15% capacity and we still have 100% of our debt load there,” McKenna said. “The government has done nothing to help us, other than saying, ‘I feel your pain.'”
Increase the wage subsidy
The government plans to raise the wage subsidy to cover 75 percent of employee wages to cope with the “second wave ferocity,” according to the tax update. Currently, the maximum rate is 65%.
But McKenna said the subsidy does not pay off the airlines’ equity debt.
“The difficult part of the industry is that it is heavily in debt because they have to buy planes, hangers and equipment and are heavily in debt and have no income to make up for it,” he said.
McNaney said he hoped to see details of a financial aid program, more support for regional airlines, funding for Nav Canada (so he doesn’t have to raise fares for airlines) and rapid COVID-19 tests at airports. Instead, he said, the government has been repeating the same message the industry has been hearing for months.
Air Transat spokesman Christophe Hennebelle said the economic statement was a missed opportunity to announce a “solid plan” to ensure that the Canadian airline industry remains competitive.
“We are disappointed,” Hennebelle said in a statement. “We are still awaiting the start of the assistance discussions announced on November 8, while significant support to the sector has already been provided for months in many countries around the world.”
$ 980 million in payments, relief for airport rental
The economic upgrade included $ 500 million over six years proposed to initiate a new transfer payment program for major airports. According to the statement, projects such as the Métropolitain express Réseau station at Montreal airport would be eligible for funding.
The government is also planning to extend $ 229 million in franchise to airport authorities that pay rent to the federal government and Billy Bishop Toronto City Airport. An additional $ 65 million is planned for airport authorities in 2021.
Another $ 186 million would be allocated over two years starting in 2021 to help small and regional airports through the “Airport Capital Assistance Program”.
Daniel-Robert Gooch, president of the Canadian Airports Council, said it would take a few days to understand the announcement in more detail, but suggested it wasn’t enough.
“It’s nice to see the aviation industry getting direct attention, but that’s far enough below what the industry needs to withstand this crisis,” Gooch said in a statement to CBC News.
Tim Perry, president of the Air Line Pilots Association, said support for airports should have a “positive spinoff” for airlines. He said his group continues to ask the federal government to remove the “barriers” in place for airlines to fly again when “Canadians are ready to travel again.”
Talks began this month with major airlines on the bailout
After months of increasing pressure from the industry, this month the government initiated talks with major Canadian airlines on an industry-specific bailout package that could include loans and other support.
The Globe and Mail reported that the talks started slowly and frustratingly. The government had a list of demands, including airlines opening their books, reimbursing passengers for canceled flights, and avoiding the cancellation of planned new aircraft purchases made in the country, the Globe said.
Earlier in the day, Conservative MP Matt Jeneroux, who represents Edmonton Riverbend, targeted the government for failing to provide industry-specific support quickly enough.
“Although other countries around the world immediately offered support to their airlines, this government did not recognize the crisis until eight months into the pandemic,” Jeneroux said today during the questioning period.
Transport Minister Marc Garneau said earlier this month that “a strong and competitive aviation industry is vital to the Canadian economy,” but said an aid package will be conditional on airlines offering refunds. .
“Before we spend a dime of taxpayers’ money on airlines, we will make sure Canadians get their refunds,” Garneau said in a November 8 press release.
Since then, Nav Canada has warned its air traffic controllers across the country that layoffs are on the way as part of a “complete restructuring”. The company monitors millions of kilometers of airspace and its air traffic controllers keep planes separate in the air and on the ground.
The company experienced a $ 518 million drop in revenue from its budget. According to the internal note, Nav Canada has “urged” the government for help. Since September 22, the company has cut more than 700 executives and employees – 14% of its workforce and nearly all of its students. Nav Canada is also studying seven towers across Canada for possible service reductions.
Pilots, flight attendants and other aviation workers protest on Parliament Hill, frustrated that Transport Minister Marc Garneau has not come up with an aid plan for the industry, seven months after the pandemic began. 1:53
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