Transat to receive up to $570 million financial aid from Canada
Transat reached an agreement with the Canadian authorities which will provide it with up to $570 million (CA$700 million) of additional cash in the framework of the Large Employer Emergency Financing Facility (LEEFF). “With this support, we now look forward to resuming operations as soon as safe travel is possible and travel restrictions can be lifted,” Jean-Marc Eustache, President, and Chief Executive Officer, said in a statement.
The airline will use the money to pay back customers whose flights have been canceled due to the pandemic. "The funds obtained will also enable us to reimburse our customers whose travel had to be canceled due to the pandemic under conditions that are sustainable for the company, which we welcome," Eustache added.
Earlier in April 2021, Transat's main competitor and largest player in the country, Air Canada (ADH2), also reached an agreement with the federal government to receive financial assistance of up to $4.6 billion (CA$5.9 billion).
In 2019, the two airlines entered discussions regarding a merger in which Air Canada (ADH2) would have bought Transat. The project, however, fell through in April 2021 after the competition authorities of the European Commission argued it would have a negative impact for consumers.
Canada’s third main airline, WestJet, has not received financial aid from the federal government. A day before Transat’s aid was announced, the government of Alberta where WestJet is based voiced their concerns that the state aid provided to its two competitors could unbalance the Canadian market.
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