Aviation sector talks for government aid could total up to $9-billion in bailout loans

Open this photo in gallery:

Canada’s aviation sector is in talks for government bailout loans totalling as much as $9-billion, according to Jerry Dias, head of the Unifor labour union.

Aid talks between the government and airlines, airport operators, NAV Canada and other companies battered by the pandemic’s near-complete travel shutdown are continuing, said Mr. Dias, who has been briefed on the talks by government and companies at the table.

Canada’s airlines have laid off thousands of pilots, flight attendants and sales agents, and slashed capacity amid the COVID-19 pandemic as governments closed borders and imposed travel restrictions. A new wave of the virus and more restrictions, including tests before boarding and on arrival as well as stays in quarantine hotels, have deepened the industry’s crisis.

Mr. Dias said the worsening of the prolonged crisis has increased the amount of loans being discussed in Ottawa to $9-billion from $7-billion.

“The question is going to be, is that going to be enough?” Mr. Dias said.

He pointed to the prospect of more layoffs at NAV Canada, the country’s air traffic controller, and new route suspensions and cancellations that have cut off parts of the country from commercial air service. Laid-off pilots are losing their certification because they cannot get flight time, said Mr. Dias, who represents 15,000 aviation workers.

“You can’t have a build-back-better economic strategy as a nation without pilots, without air traffic controllers, without a strong aviation sector.”

Air Canada’s layoffs exceed 20,000 while WestJet Airlines Ltd. has laid off about half its 11,000-person work force. On Monday, Sky Regional Airlines said it would shut down after losing a contract with Air Canada, eliminating 650 jobs. Porter Airlines, Sunwing Airlines and Air Transat have suspended their normal operations.

Airlines, airport authorities and the unions that represent the workers have called for several months for aid. The government said in the fall it would commence talks. Then-transport minister Marc Garneau said any help from taxpayers would come with key conditions: that customers get refunds for flights cancelled in the pandemic, that regional access to flights be maintained and restored, and that Canadian aviation jobs be protected.

“We continue to emphasize this in our ongoing conversations with the airlines,” said Jessica Eritou, a spokeswoman for the Department of Finance. “The government is in discussions with air carriers on potential additional financial assistance.”

The aviation sector has received more than $1.7-billion in government wage subsidies. The government in the fall announced more than $1-billion in support for airports and small airlines.

The industry, however, said this falls short of the aid provided by most other countries.

Mr. Dias said he is speaking up now because he is “frustrated” with the delays in aid as the one-year anniversary of the pandemic in Canada approaches. “I’ve had enough,” he said. “I have met so many thousands on layoffs. The time for dilly-dallying is gone.”

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.