Air Canada is withdrawing from further Government of Canada financial support due to its improved liquidity position and ongoing recovery from the COVID-19 pandemic, the airline said on Friday (Nov. 19).
The support package, announced in April 2021, provided the carrier access to interest bearing loans of $5.375 billion through several separate credit facilities.
To date, Air Canada has only accessed the facility solely dedicated to refunding customers' non-refundable tickets, while all other remaining facilities totalling $3.975 billion have not been used.
"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 $7.1-billion financing. 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 $3.975 billion in facilities that were never accessed and remain unused," said Michael Rousseau, president and CEO.
"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, recognizing 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. In addition to helping preserve thousands of jobs and travel choice for Canadians, the assistance offered to Air Canada importantly served as an extra level of insurance that enabled us to raise additional liquidity on our own to manage the pandemic and give us sufficient resources to effectively compete in the post-pandemic marketplace."
Air Canada's support agreement with the government, under the Large Employer Emergency Financing Facility, provided access to up to $5.375 billion in interest bearing loans and $500 million in equity for a total of $5.875 billion in liquidity.
In the third quarter of 2021, Air Canada completed a series of financing transactions generating gross proceeds of about $7.1 billion.
These financing transactions provided substantial liquidity to Air Canada and extended debt maturities out until near the end of the decade.
With the release of its third quarter results on November 2, 2021, Air Canada reported that as of September 30, 2021, its unrestricted liquidity was approximately $14.4 billion and consisted of roughly $9.5 billion in cash and cash equivalents, short-term and long-term investments, and about $4.9 billion in available undrawn credit facilities, including the $3.975 billion in unused government facilities being cancelled with today's announcement.