Air Canada Withdraws From Government of Canada Financial Support As Industry Recovery Continues


MONTREAL, November 19, 2021 / CNW Telbec / – Air Canada today announced that due to its improving liquidity situation and the continued recovery from the pandemic, it is withdrawing from other government activities of Canada financial aid. The support package, announced in April 2021, provided the carrier has access to interest-bearing loans of $ 5.375 billion through several separate credit facilities. To date, Air Canada has only accessed the facility dedicated solely to reimbursing non-refundable customer tickets, while all other remaining facilities totaling $ 3.975 billion have not been used.

“Air from Canada COVID-19 recovery continues. We are recalling employees, adding new routes and frequencies to our network, and restoring services, and, in the last quarter, we completed a $ 7.1 billion funding. Today, another convincing sign of our progress, we are announcing our withdrawal from the main funding provisions of our support agreement with the government of Canada for the $ 3.975 billion in installations which have never been consulted and which remain unused ”, declared Michel rousseau, President and CEO.

“We deeply appreciate the government of from Canada support, as it helped keep a level playing field at a time when governments around the world, recognizing the importance of air travel to their economies, were also helping their domestic carriers in the face of the unprecedented slowdown caused by COVID-19. In addition to helping to preserve thousands of jobs and travel choices for Canadians, the assistance provided to Air Canada has mostly served as an additional layer of insurance that allowed us to raise additional cash on our own. to manage the pandemic and give us sufficient resources to compete effectively. in the post-pandemic market. “

Background

Air from Canada support agreement with the government, under the Large Employers Emergency Funding Mechanism, provided access to up to $ 5.375 billion in interest-bearing loans and $ 500 million in equity for a total of $ 5.875 billion in liquidity. It consisted of several elements, including:

  • A $ 1.5 billion secure renewable facility and three $ 825 million unsecured revolving credit facilities. None of $ 3.975 billion available under these facilities was never taken and, under its agreement with the government, Air Canada had the right to terminate them at any time without penalty and did so.

  • A $ 1.4 billion non-secure facility only dedicated to reimbursement of non-refundable tickets from customers. About 58 percent of eligible customers have requested refunds, including those not covered by the government facility, with the balance voluntarily retaining future flight credits with the carrier. To date, Air Canada has consulted approximately $ 1.2 billion of installation, with the money going directly to customers. The money used for the reimbursement of non-refundable tickets will be reimbursed according to the terms of the agreement with interest paid quarterly by Air Canada.

  • The government bought $ 500 million value of Air Canada’s common shares at $ 23.18 per share, which represents about 6 percent of the current free float, which it continues to hold.

  • Air Canada also issued approximately 14.6 million 10-year warrants to the government to purchase an equal number of Air Canada shares, at a price of approximately $ 27.27 per share. With the end of the operating credit facilities, half of these bonds, which have not yet been acquired by the government, were immediately canceled. Subject to TSX approval, Air Canada intends to call the balance of the acquired warrants for cancellation on their terms at fair market value.

In the third quarter of 2021, Air Canada completed a series of financing transactions generating gross proceeds of approximately $ 7.1 billion. These financing transactions provided significant liquidity to Air Canada and extended debt maturities until the end of the decade. When releasing its third quarter results on November 2, 2021, Air Canada announced that as of September 30, 2021, his unlimited liquidity was around $ 14.4 billion and consisted of approximately $ 9.5 billion in cash and cash equivalents, in short and long-term investments, and approximately $ 4.9 billion in available unused credit facilities, including $ 3.975 billion in unused government facilities being canceled with today’s announcement.

ATTENTION REGARDING FORWARD-LOOKING INFORMATION

This press release contains forward-looking statements within the meaning of applicable securities laws. Forward-looking statements relate to analyzes and other information based on forecasts of future results and estimates of amounts not yet determinable. These statements may involve, without limitation, comments relating to directions, strategies, expectations, planned transactions or future actions. Forward-looking statements are identified using terms and expressions such as “preliminary”, “anticipate”, “believe”, “may”, “estimate”, “expect”, “intend to” “,” Could “,” plan “,” foresee “,” project “,” will “,” would “and similar terms and expressions, including references to assumptions.

Forward-looking statements, by their nature, are based on assumptions, including those described in this press release and the documents incorporated by reference herein, and are subject to significant risks and uncertainties. Forward-looking statements are not reliable due, among other things, to changing external events and general uncertainties regarding Air Canada’s business. Actual results may differ materially from results shown in forward-looking statements due to a number of factors, including those described below.

Air Canada, along with the global airline industry, continues to face a significant drop in traffic compared to 2019 and a corresponding drop in revenue and cash flow due to the COVID-pandemic. 19 and travel restrictions imposed in many countries around the world. Although improving, visibility into travel demand is limited given the evolution of government restrictions in place around the world and the severity of restrictions that have only recently started to ease in Canada. . Air Canada cannot predict the total impact or when conditions might improve. Air Canada is actively monitoring the situation and will respond as the impact of the COVID-19 pandemic evolves, which will depend on a number of factors including the evolution of the virus, the availability of rapid and effective tests, vaccinations and treatments against the virus, government actions and passenger reaction, the complexities of restarting an industry whose many stakeholders must coordinate with one another as well as the timing and extent of a recovery in international and business travel which are important segments of Air’s markets Canada, none of which can be predicted with certainty.

Other factors may cause results to differ materially from results shown in forward-looking statements, including economic and geopolitical conditions, Air Canada’s ability to successfully achieve or maintain positive net profitability, business conditions. industry and market and demand environment, Air Canada’s ability to pay its debt and maintain or increase liquidity, competition, energy prices, Air Canada’s dependence on l ” with regard to technology, cybersecurity risks, Air Canada’s ability to successfully implement appropriate strategic initiatives and other significant initiatives (including Air Canada’s ability to manage operating costs) , other epidemic diseases, terrorist acts, war, Air Canada’s dependence on key suppliers, losses suffered, changes in laws, regulatory developments o u procedures, Air Canada’s ability to successfully operate its new frequent flyer program, climate change and environmental factors (including weather systems and other natural phenomena and factors resulting from man-made sources), service, Air Canada’s dependence on regional and other carriers, Air Canada’s ability to preserve and develop its brand, relationships with employees and labor and its costs, dependence on Air Canada with regard to Star Alliance® and joint ventures, limitations due to restrictive covenants, pending and future litigation and actions by third parties, currency exchange, risks generally associated with the grounding of types of fleets of aircraft, pension plans, Air Canada’s ability to attract and retain the required personnel, insurance issues and costs, as well as factors identified in available disclosure records ur www.sedar.com and, in particular, those identified in section 17 “Risk factors” of Air Canada’s 2020 MD&A and in section 14 “Risk factors” of Air Canada’s third quarter 2021 MD&A. The forward-looking statements contained or incorporated by reference in this press release represent Air Canada’s expectations as of the date of this press release (or as of the date on which they are otherwise indicated) and are likely to be made. change after this date. However, Air Canada disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable securities regulations.

About Air Canada

Air Canada is from Canada largest domestic and international airline, and in 2019 was among the 20 largest airlines in the world. He is from Canada flag bearer and founding member of Star Alliance, the most comprehensive air transport network in the world. Air Canada is the only international network operator in North America to receive a four-star rating according to the independent British research firm Skytrax. In 2020, Air Canada was named Global Traveler’s Best Airline in North America for the second year in a row. In January 2021, Air Canada received APEX diamond status certification for the Air Canada CleanCare + biosecurity program for the management of COVID-19, the only airline in Canada to achieve the highest APEX ranking. Air Canada is also committed to achieving a goal of net zero emissions from all of its global operations by 2050. For more information, please visit: aircanada.com/media, follow Air Canada on Twitter and LinkedIn, and join Air Canada on Facebook.

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