Passenger rebate program part of Ottawa’s financial relief deal with Air Canada: sources

The federal government has reached an agreement with Air Canada to provide the pandemic-battered airline with financial support in exchange for refunds for customers who had their flights cancelled last year because of the COVID-19 pandemic.

Support for the country’s largest airline will come in the form of a loan, not a direct financial bailout, according to sources with knowledge of the matter. CBC News is not naming the sources because they are not authorized to speak publicly about the issue.

The government also has a plan to create a pool of funds that will allow passengers who saw flights cancelled with other airlines last year to receive refunds as well, the sources said.

Deputy Prime Minister Chrystia Freeland and Transport Minister Omar Alghabra are expected to provide details at a press conference at 7 p.m. ET.

Ottawa has been negotiating with airlines for months now on a support package for the industry, which has been hit hard by a massive reduction in domestic and international travel.

The government has been pushing the airlines to agree to refund customers, restore regional routes and protect jobs across the industry as conditions for support.

In March, CBC News reported the price tag for a package that included all the country’s major airlines could reach somewhere between $7 billion and $9 billion.

Jerry Dias is national president of Unifor, which represents about 15,000 workers in the airline industry. He said at the time that talks originally focused on the prospect of the government extending a $7 billion loan to be repaid by the airlines at one per cent interest over 10 years — but the final package could be substantially larger.

Sources told CBC News at the time that WestJet had been pushing the federal government during negotiations to prioritize coming up with a plan to safely restart air travel.

More to come …

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