Air Transat is getting a $150 million assistance package from the Trudeau government.
Transat A.T. Inc. announced today that it has reached an agreement with Canada Enterprise Emergency Funding Corporation (“CEEFC”), a federal Crown corporation, to obtain $100 million in added financing, as well as $50 million in credit.
“In this final LEEFF (Large Employer Emergency Financing Facility) loan, Transat will receive up to $150 million to protect Canadian jobs and ensure operations can continue, despite the company’s ongoing capital operating challenges as a result of the pandemic,” the government said in a press released. “The amount consists of $100 million up front in LEEFF loans, and another $50 million loan contingent on Transat raising third-party funding (matched dollar for dollar up to $50 million).”
Ottawa announced in April, 2021 that Transat would receive loan financing through the LEEFF program totaling $700 million. As a condition of the loan agreement, Transat agreed to provide refunds for all pandemic-related cancellations to eligible customers—$310 million of the total financing will be a repayable loan to finance these refunds.
On March 10, 2022, Transat received an additional $43.3 million rom the LEEFF program for traveller refunds and negotiated favourable 20-month deferrals for certain key terms of the unsecured LEEFF financing agreement.
“This complementary financing and the changes to the existing agreements strengthen our treasury position and reinforce our financial resilience,” said Annick Guérard, President and CEO of Transat A.T. Inc. “This important financing milestone, combined with sales that have been doing well in recent months, will give us the financial flexibility to deploy our strategic plan with optimism and confidence.”
“Since its founding in 1987, Transat has become a major employer in Montreal—and across Canada—as Canada’s third largest airline, with over 3,000 active employees,” the government stated. “This loan agreement requires Transat to maintain its workforce.
“As a further requirement to this loan, Transat is obligated to follow the Air Passenger Bill of Rights.”
As of today, Ottawa has stopped accepting new LEEFF applications. Officials said the policy reflects :Canada’s strong economic recovery from the pandemic, and the fact that no new applications for securing LEEFF loans have been received from Canadian companies, except for Transat, over the last year.
“The period for LEEFF applications is now closed.”
