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Canada to bail out Air Canada in $5.9B package that includes customer refunds for all cancelled flights, government stake in company, and reduced executive compensation


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WWW.CBC.CA

The federal government has reached an agreement with Air Canada that will provide the pandemic-battered airline with financial support — while committing the airline to refunding customers who saw their flights cancelled last year because of the COVID-19 pandemic.

 

 

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Under the deal, the government will extend to the country's largest airline a variety of low-interest loans worth up to $5.4 billion and take an equity stake in the company by purchasing $500 million in stocks. 

 

In exchange for federal government support, Air Canada has agreed to refund customers who had their flights cancelled last year because of the COVID-19 pandemic. 

 

The airline also has agreed to restore flights on nearly all suspended regional routes, to cap compensation for company executives at $1 million per year and to suspend share buybacks and the payment of dividends to shareholders during the loan period.

 

Seems pretty reasonable for a corporate bailout. They need to pay it back (much will likely be waived over time), customers get refunds instead of the existing credit/coupons, and the airline can't give the money out as executive compensation or dividends. Also forces the company to re-open their shuttered low-use air routes that they've closed in the last year.

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