Air Canada will again be flying out of Kamloops Airport — in fact, the national airline will be required to resume service in Kamloops and other regional airports as part of a multi-billion-dollar aid agreement it has reached with the federal government.
A series of loans, plus the federal government buying into the company, means $5.9 billion for the airline that, due to the pandemic, lost almost $3.8 billion in 2020.
The federal government will give Air Canada a series of low-interest loans of up to $5.4 billion and buy about $500 million worth of company stock, at a price of $23.18 per share.
Interestingly, Air Canada was a government-owned airline from its creation in 1937 as Trans-Canada Air Lines until its privatization in 1988. In 1965 the company’s name was changed from Trans-Canada Air Lines to Air Canada, an idea brought forward by then-neophyte MP Jean Chretien.
Before the loans and investment agreement was announced on Monday (April 12), Air Canada has received more than a half-billion dollars from the Canada Emergency Wage Subsidy.
Conditions of the aid package include Air Canada reinstating service to smaller regional airports where it had halted flights amid the pandemic. This means the company’s planes will be back in the Kamloops skies after local service was grounded in early January.
Kamloops Airport operations manager Ed Ratuski said Air Canada was planning to resume Kamloops-Vancouver and Kamloops-Calgary flights in June, noting flights are on sale now. The arrangement with the federal government solidifies that decision, he said.
The frequency of the flights has yet to be determined. Ratuski said the service will help rebuild the market for when people are advised it is safe to travel for leisure. Currently, public health officials have strongly advised essential travel only.
“We’re happy to see that those negotiations are coming to a conclusion so that we can start to confirm a path forward as we recover,” Ratuski said.
Passenger service offered out of Kamloops Airport includes at least daily flights to Calgary flights by WestJet, daily flights to Vancouver by Pacific Coastal (increased frequency in the spring on Fridays and Sundays to twice daily), Monday and Thursday flights to Vancouver by Central Mountain Air and a three-times-per-week service to Prince George by Central Mountain Air.
Ratuski said WestJet is also in discussions with the federal government and that all plans remain dependent on the COVID-19 situation.
In addition to the regional airport service condition of the federal financial aid package, Air Canada must issue refunds to all passengers who had flights cancelled due to the pandemic, maintain employment at levels that are no lower than those of April 1 of this year, protest employees’ pension fund and pay executives no more than $1 million per year.
Air Canada now has just under 15,000 employees in Canada, but laid off tens thousands of workers since the pandemic began in March 2020.
"Air Canada entered the pandemic more than a year ago with one of the global airline industry's strongest balance sheets relative to its size,” company president and CEO Michael Rousseau said in a statement. “We have since raised an additional $6.8 billion in liquidity from our own resources to sustain us through the pandemic, as air traffic ground to a virtual halt in Canada and internationally.
““The additional liquidity program we are announcing today achieves several aligned objectives as it provides a significant layer of insurance for Air Canada, it enables us to better resolve customer refunds of non-refundable tickets, maintain our workforce and re-enter regional markets. Most importantly, this program provides additional liquidity, if required, to rebuild our business to the benefit of all stakeholders and to remain a significant contributor to the Canadian economy through its recovery and for the long term.
At a news conference to announce the deal, Deputy Prime Minister Chrystia Freeland lauded the agreement.
“Taxpayers aren't footing the bill,” she said. “This is a loan facility and the government of Canada fully expects to be paid back. This is a good and fair deal for Canada and Canadians.”
Jerry Diaz, national president of Unifor, the union that represents Air Canada employees, also welcomed the news.
"Today's announcement by the federal government is a recognition that aviation workers are pivotal to the Canadian economy," Dias said in a statement. "The relief package provides a good balance of certainty for communities large and small, the company, and its workers."
The federal government said talks continue with other airlines and similar aid packages may be announced.