PBO estimates that the federal government will deduct $ 177 million from Air Canada transactions


The Air Canada logo will appear in the hangar at Vancouver International Airport in Richmond, British Columbia, March 20, 2020. (The Canadian Press / Darryl Dyck)

Ottawa-Parliamentary Budget Officer says the federal government can make about $ 177 million in 10 years from a support deal with Air Canada.

The PBO estimate is based on Air Canada, which used only part of the $ 5.9 billion aid package that the airline agreed with the government in April.

The package includes a government refund of $ 500 million in 6% stake in airlines, $ 1.5 billion in secured credit, $ 2.475 billion in unsecured credit, and to travelers affected by COVID-19. It included acquiring $ 1.4 billion in unsecured credit aimed at.

PBO’s forecast is based on Air Canada, which uses approximately $ 1.2 billion in funds for refunds to travelers, but does not use any other available credit.

Air Canada says it will maintain government credit as insurance while advancing other refinancing options. On Wednesday, the airline announced that it had completed a $ 7.1 billion refinancing transaction.

Under the contract with Ottawa, Air Canada required a refund for passengers whose flights were canceled due to COVID-19, but further restrictions will be imposed if the airline accesses other credit facilities. ..

Canadian press