Ottawa offers airlines up to $150M in fuel-cost loans
Federal government launching relief program as carriers struggle with soaring jet fuel costs driven by Middle East tensions and oil supply disruptions.
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The federal government is offering airlines up to $150 million each in loans to manage soaring jet fuel costs driven by geopolitical tensions in the Middle East.
Finance Minister François-Philippe Champagne announced the program Monday, saying ballooning energy costs are pressuring airlines' balance sheets. The relief is meant to help keep air travel affordable for passengers.
Carriers signing up must commit to buy Canadian, restrict dividends and executive compensation, and maintain existing jobs in Canada. The International Air Transport Association is forecasting billions in lost profits across North American carriers due to high fuel prices caused by the Middle East war and closure of the Strait of Hormuz, which has cut off nearly a fifth of global oil supply.
This marks the second federal airline aid package since COVID-19. Air Canada, Porter Airlines, and Air Transat accepted support during the pandemic. The current crisis comes as carriers face sustained pressure from elevated fuel costs with no immediate resolution in sight.