Air Canada is the flag carrier of Canada. Credit: Air Canada.

Air Canada has decided to pull out of a financial aid programme from the Canadian Government after a travel rebound boosts its liquidity position.

In April, the government offered C$5.9bn in liquidity to the Canadian flag carrier, which included an interest-bearing loan of $4.25bn (C$5.37bn).

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

The government also bought an equity stake of 6% in the airline for C$500m and retains this stake.

In exchange for the aid, the carrier also agreed to curbs on share buybacks, dividends and to cap senior executive compensation at C$1m per year.

To date, Air Canada only availed $949m (C$1.2bn) of the loan facility for refunding customers’ non-refundable tickets, while $3.15bn (C$3.98bn) of the loan amount remains unused.

Air Canada president and CEO Michael Rousseau said: “Air Canada’s recovery from Covid-19 continues. We are recalling employees, adding new routes and frequencies to our network and restoring services, and, last quarter, we completed a $5.6bn (C$7.1bn) financing.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“Today, in another convincing sign of our progress, we are announcing our withdrawal from the major funding provisions of our support agreement with the Government of Canada for the $4.253bn (C$3.975bn) in facilities that were never accessed and remain unused.”

Rousseau added: “We deeply appreciate the Government of Canada’s support as this helped maintain a level playing field at a time when governments around the world, recognising the importance of air travel to their economies, were also assisting their national carriers in the face of the unprecedented downturn caused by Covid-19.”

Last September, Air Canada initiated a voluntary Covid-19 study on international passengers arriving at Toronto Pearson International Airport (YYZ).