Air Canada Exits Canadian Government Support Program

Air Canada is withdrawing from the Canadian federal government’s financial support programs due to its improved liquidity position and ongoing recovery from the pandemic, the carrier announced Friday.

The support package under the Large Employer Emergency Financing Facility, announced in April 2021, provided access to interest-bearing loans of C$5.4 billion and C$500 million in equity. To date, Air Canada has accessed about C$1.2 billion of the aid dedicated to refunding customers’ nonrefundable tickets, according to the company. Approximately 58 percent of eligible customers requested refunds. The money used for refunding those tickets will be repaid as per the terms of the agreement with interest paid quarterly by Air Canada.

The government purchased $500 million worth of Air Canada common shares at C$23.18 per share, which it continues to hold. Air Canada also issued to the government about 14.6 million 10-year warrants for the purchase of an equal number of Air Canada shares, at a price of approximately C$27.27 per share. With the termination of the operating credit facilities, half of these warrants, which have not yet vested with the government, have been canceled immediately. Subject to Toronto Stock Exchange approval, Air Canada intends to call the balance of the vested warrants for cancellation as per their terms at fair market value, according to the carrier.

RELATED: Air Canada to Issue Refunds for Canceled Tickets in Government Agreement