Canada eyeing loans for airlines that are 'running out of runway' - sources

Canada is finally close to an aid package for airlines that will likely offer low-interest loans to carriers versus taking outright stakes, three sources say, eight months after the COVID-19 pandemic decimated air travel. "We're running out of runway on this," said a government source, citing concerns about the viability of both airlines and airports. Several countries, including the US and Australia, have offered billions in direct emergency support to their airlines. But Canada - the world's second largest country by area and one heavily dependent on airline travel to connect remote regions - has not. Although Air Canada and WestJet, the two main carriers, and transport unions have been pleading for help for months as passenger demand cratered, Canada's finance ministry initially resisted the idea of providing specific sectoral aid, said two of the sources. Under pressure from some key ministers, Finance Minister Chrystia Freeland is now looking at how to specifically help the airlines because it became clear the airline sector would not bounce back in the fall, the first source said. Air Canada and WestJet have already cut many routes, especially to smaller airports. "Discussions are ongoing, they're positive," said the first source, adding that the focus now is on "making sure the sector and those regional routes are protected and the airports remain operational."<br/>