Canada would provide an aid package to the airlines.
Canada is finally close to offering an airline aid package, three sources told Reuters.
“We are running out of track on this,” said one government source, citing concerns about the viability of airlines and airports, who asked to remain anonymous given the sensitivity of the situation.
See also: Air Canada will pay almost four times less for the purchase of Transat.
Several countries, including the United States and Australia, have offered billions in direct support to their airlines. However, Canada – the second largest country in the world by area and one that relies heavily on air travel to connect remote regions – has not.
Although Air Canada and WestJet, the two major airlines, and the transportation unions have been calling for help for months while passenger demand was plunging, Canada’s finance ministry initially resisted the idea of providing help, two of the sources said.
See also: Air Canada Rouge resumed operations after 7 months.
Under pressure from some key ministers, Finance Minister Chrystia Freeland, who took office in August, is now looking at ways to help airlines specifically because it became clear that the sector would not recover in the fall, one source said.
Air Canada and WestJet have already cut many routes, especially to smaller airports.
“The discussions are ongoing, they are positive,” said one of the sources, adding that the goal now is “to make sure that the industry and those regional routes are protected and that the airports continue to operate.
One of the main options to help airlines is low-interest loans, but the sources were unable to provide details on amounts or conditions.
The other possibility is for the government to take a stake in the airlines, but this is unlikely, said two sources.
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