Sunwing is turning to an emergency federal loan program aimed at helping Canada’s largest businesses weather the impacts of the coronavirus pandemic after new travel restrictions were announced last week.
The loan agreement, announced Monday, will see Sunwing Airlines Inc. and Sunwing Vacations Inc. access $375 million under the Large Employer Emergency Financing Facility (LEEFF) – the first Canadian airline to do so.
There has been little uptake for the LEEFF since it was first announced in May, with only two other companies – Gateway Casinos & Entertainment Ltd. and Conuma Resources Ltd. – having been approved for loans under the program.
To qualify for the LEEFF, a company must require a loan of at least $60 million and have more than $300 million of annual revenue. Other stipulations include a commitment to publish annual climate-related disclosure reports, and an agreement to place restrictions on executive compensation, dividends and share buybacks.
As of Feb. 1, Sunwing has drawn $50 million of the loan.
Canada’s already-battered airlines agreed to halt flights to the Caribbean and Mexico until April 30 to help contain the spread of COVID-19 amid growing concerns of a more contagious variant of the virus.
Transport Minister Omar Alghabra acknowledged the current challenges facing Canadian airlines on Friday and said a federal assistance package for the industry is in the works. The airline industry hasn’t seen see any form of targeted government aid during the pandemic.
“Our government understands that a strong air sector is vital for Canada’s economy and the well-being of Canadians,” Alghabra said during a press conference.
“With passenger levels still down almost 90 per cent, airlines have been forced to take drastic measures to remain viable. The sector cannot respond to these challenges on its own.”
Sunwing, which flies mostly to sun destinations, employs almost 3,000 Canadians full time.