OTTAWA: Air Canada, struggling with a collapse in traffic due to the Covid-19 pandemic, reached a deal on Monday on a long-awaited aid package with the federal government that would allow it to access up to C$5.9 billion in funds.
As part of the deal, Air Canada agreed to ban share buybacks and dividends, cap annual compensation for senior executives at C$1 million a year and preserve jobs at the current level, which is 14,859. Canada, the world’s second-largest nation by area, depends heavily on civil aviation to keep remote communities connected. Opposition politicians fretted that further delays in announcing aid could result in permanent damage to the country.
“Maintaining a competitive airline sector and good jobs is crucially important,” Finance Minister Chrystia Freeland told reporters, adding the equity stake would allow taxpayers to benefit when the airline’s fortunes recovered.
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