Airlines disappointed with no bailout in federal budget update

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Groups representing the airline industry say they are disappointed that the federal government’s economic update has not offered the sector, hit hard by the pandemic, new assistance to help it survive the crisis.
The federal government has said it is prepared to spend $ 980 million in support and rent relief for Canadian airports. However, he did not explain how he intends to help airlines struggling with a demand drop of up to 90%, which has led them to cancel dozens of regional routes and lay off or lay off thousands of people. workers.

Mike McNaney, President and CEO of the National Airlines Council of Canada, represents the country’s largest carriers, including Air Canada, West Jet and Air Transat.

“While other countries around the world have moved forward months ago to provide sector support, we remain a global outlier and are seemingly stuck at step zero in the government planning process,” McNaney said.

“We have to move. We have to go. ”

The fiscal 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 states that the government is “currently establishing a process with major airlines regarding financial assistance” which is conditional on reimbursing Canadians for 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 class actions have also been filed.

Finance Minister and Deputy Prime Minister Chrystia Freeland said $ 1.2 billion is in the current economic budget for airports, airport infrastructure and regional airlines. She said detailed discussions were underway with major airlines for further support.

“To know exactly how to support them, we really need to see what their financial situation is,” Ms. Freeland told Rosemary Barton, CBC’s chief political correspondent.

CBC chief political correspondent Rosemary Barton spoke to Freeland about what the plan was for airlines under pressure from COVID-19. 1:31

$ 206 million to help regional air transport

The fiscal update proposed $ 206 million over two years to help regional airlines create a new “Regional Airline Initiative.”

“He’s not starting to cover what needs to be done,” John McKenna, president of the Air Transport Association of Canada, told CBC News. “We are again very disappointed.

“This government does not understand our industry. They don’t understand the problems we find ourselves in. ”

McKenna’s organization represents around 35 large and small airlines, including Porter – who has founded his entire operation– leisure carrier Sunwing and more than a dozen regional operators serving rural and remote communities.

McKenna said his organization had not been consulted and that he was uncertain what this regional initiative was all about.

“Our industry has been working for over eight months at 15% capacity and we still have 100% of our debt there,” McKenna said. “The government has done nothing to help us other than saying, ‘I feel your pain.’ ”

Wage subsidy boost

The government plans to increase the wage subsidy to cover 75 percent of employee salaries to deal with “second wave ferocity,” according to the budget update. Currently, the maximum rate is 65%.

But McKenna said the subsidy did not pay off the airlines’ capital debt.

“The hardest part of the industry is that it is heavily in debt because it has to buy planes, hangers and equipment and is heavily in debt and has no income to compensate.” , did he declare.

McNaney said he hoped to see details of a financial aid program, more support for regional airlines, funding from Nav Canada (so there is no need to increase fees for airlines air) and rapid tests for COVID-19 at airports. Instead, he said, the government repeated the same message the industry has been hearing for months.

People line up and check in for an international flight at Pearson International Airport during the COVID-19 pandemic in Toronto on Wednesday, October 14, 2020. (THE CANADIAN PRESS)

Air Transat spokesperson Christophe Hennebelle said the economic statement was a missed opportunity to announce a “robust 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 talks on the aid announced on November 8, when significant support to the sector has already been provided in many countries around the world for months.”

$ 980 million in payments, planned rent relief for airports

The economic update included $ 500 million over six years proposed to start a new transfer payment program for major airports. Projects such as the Réseau express métropolitain station at Montreal airport would be eligible for funding, according to the press release.

The government also plans to provide $ 229 million in rent relief 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 dollars would be earmarked over two years from 2021 to help small airports 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 in more detail what had been announced, but suggested that was not enough.

“It’s good to see the airline industry getting direct attention, but it doesn’t meet the needs of the industry to weather 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 “positive benefits” for airlines. He said his group continues to call on the federal government to remove “barriers” in place for airlines to resume flight when “Canadians are ready to travel again.”

Talks began this month with major airlines over the rescue

After months of mounting pressure from the industry, the government this month began talks with major Canadian airlines over an industry-specific bailout that could include loans and other aids.

The Globe and Mail reported that talks got off to a slow and frustrating start. The government had a list of claims, including airlines opening their books, reimbursing passengers for canceled flights and avoiding the cancellation of planned purchases of new planes made in the country, the Globe said.

Earlier today, Conservative MP Matt Jeneroux, who represents Edmonton Riverbend, criticized the government for not providing industry specific support quickly enough.

“Although other countries around the world immediately offered their support to their airlines, this government did not ‘recognize the crisis until eight months after the start of the pandemic,” Jeneroux said during question period today. hui.

Check-in kiosks are plastic-covered at domestic check-in at Vancouver International Airport on Tuesday, June 9, 2020 (Jonathan Hayward / Canadian Press)

Transport Minister Marc Garneau said earlier this month that “a strong and competitive airline industry is vital to the Canadian economy,” but said an aid package would be conditioned by airlines offering refunds.

“Before we spend a dime of taxpayer dollars on the airlines, we’ll make sure Canadians get their refunds,” Garneau said Nov. 8 in a press release.

Nav Canada has since warned its air traffic controllers across the country that layoffs are underway as part of a “complete restructuring”. The company monitors millions of kilometers of airspace and its air traffic controllers keep planes separate in the sky and on the ground.

The company reported a $ 518 million drop in revenue compared to budget. According to the internal memo, Nav Canada “urged” the government to help. Since September 22, the company has cut more than 700 managers and employees – 14 percent of its workforce and almost all of its students. Nav Canada is also studying seven tours across Canada for possible service reductions.

Pilots, flight attendants and other aviation workers demonstrate on Parliament Hill, frustrated that Transport Minister Marc Garneau failed to present an industry aid plan, seven months after the start of the pandemic. 1:53

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