Unifor president Jerry Dias says the long-awaited support package for airlines facing financial hardship from the COVID-19 pandemic will surpass an original target of $7 billion.
Dias, who’s been at the heart of the negotiations, told CTV News Channel’s Power Play on Thursday that while some form of government support – bailout or loan – is still being negotiated with the airlines, the proposed amount has increased with reports that certain airlines will refund their customers for unused tickets.
“It originally was seven billion dollars for the entire industry over 10 years at one per cent interest, that was quite a while ago. Of course now we’re dealing with regional issues and we’re dealing with of course the repayment of the customers so I would expect now that the $7 billion is the floor, not the ceiling,” he said.
The federal government has been clear that its support is contingent on passengers being refunded for tickets rendered useless following the cancellation of flights and the application of national restrictions on international travel.
Dias told Power Play host Evan Solomon that there is “no question” Air Canada will agree to the deal to get its hands on support.
“They’re smart enough to know that there will be no assistance from the federal government, unless they take care of the political elephant in the room which is exactly that,” said Dias.
In a statement to CTV News, Air Canada said “there is nothing new to report” since it issued its quarterly earnings on Feb. 12, at which time the company said it was encouraged by the progress of the discussions with the government but no agreement had yet been reached.
Then-chief executive Calin Rovinescu said in November that Air Canada would not hesitate to reimburse customers stuck with unused tickets if the conditions of a federal bailout were reasonable.
In February, the airline announced it was cutting another 1,500 jobs and was suspending several U.S. and international routes. The month prior, it cut around 1,700 jobs. In total, the company has lost more than half its workforce since last March.
WestJet, also facing job losses and the suspension of routes, told CTV News there is “nothing new” to report at this time regarding the negotiations with the federal government.
“WestJet continues to operate at more than a 90 per cent reduction year over year. Given the economic realities created by quarantines and prolonged restrictions, we are advocating for the prioritization of a domestic travel plan and transparent policy to ensure the safe restart of travel. With broad vaccine distribution still months away, testing needs to be priority for the Government of Canada and the relationship between testing and quarantine must evolve based on data and science,” reads a statement.
Also on Power Play on Thursday, Intergovernmental Affairs Minister Dominic LeBlanc said the conversations with industry are “ongoing” and “constructive.”
LeBlanc reinforced the government’s ask that carriers also maintain regional routes and protect jobs, rather than see financial relief tied up in executive bonuses.
“Obviously there would be an obligation on the executives of those companies as well to be transparent,” he said. “We have said as a government that having a competitive, reliable, accessible airline system is critical to the economic recovery of the country.”
By late May, airlines around the world had received US$123 billion in aid — much of it loans — according to the International Air Transport Association.
Canada has doled out more than $1.7 billion to the aviation industry through the federal wage subsidy, but has steered clear of sector-specific support — the only G7 country to do so.
On Feb. 22 the government’s mandatory hotel quarantine came into effect requiring all travellers who have returned to Canada from travel abroad to stay in a designated hotel for at least three days, at their own expense, while they await a PCR test taken upon arrival.
The government, in concert with airlines, also cut travel to sun destinations in Mexico and the Caribbean in an effort to thwart jet-setting.
With files from The Canadian Press.