Air Canada, WestJet could be set for coronavirus help from Canada

The Canadian government is offering more support to Air Canada and WestJet with a new loan program aimed at large companies hit hard by the coronavirus pandemic.

Dubbed the Large Employer Emergency Financing Facility (LEEFF), Canada will provide loans starting at 60 million Canadian dollars ($42 million) to companies with annual revenues of at least CA$300 million, according to a Monday statement from Prime Minister Justin Trudeau's office.

Air Canada and WestJet could qualify for the new aid funds. Smaller carriers, like Air Transat and Porter Airlines, are assessing whether they qualify, though they also have access to other Canadian government funding sources to help them bridge the crisis.

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The aid package in Canada is similar to the $25 billion in loans available to U.S. airlines under the country's $2 trillion coronavirus aid package, known as the CARES Act. While separate from the payroll assistance carriers have already accessed, Alaska Airlines, American Airlines, United Airlines and others have applied for funds from the U.S. Treasury.

Airlines taking assistance would also face similar strings on both sides of the border. These include barring dividend payments and stock buybacks, or using funds for executive pay.

The one leg up that Canadian carriers appear to have is an absence of minimum schedule requirements. These rules in the CARES Act have forced U.S. airlines to fly nearly empty planes, further straining their balance sheets and pumping unneeded carbon into the air.

Without a requirement to fly unnecessary flights and by an odd twist of fate, Vancouver-based seaplane operator Harbour Air is due to fly more flights than either Air Canada or WestJet in May, according to Cirium schedules. In a normal month, Harbour flies less than a fifth the number of flights of either larger carrier.

Related: Air Canada suspends all US flights, likely for first time in nearly 80 years

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In addition, Air Canada, Porter and WestJet have suspended all of their flights to the U.S.

WestJet will review the new LEEFF program before deciding on "next steps," spokesperson Lauren Stewart told TPG.

Related: Porter Airlines to suspend flights until at least June

Porter is assessing whether it qualifies for the LEEFF funds before it will evaluate whether to take advantage of the program, spokesperson Brad Cicero said.

An Air Canada spokesperson did not immediately respond with comment.

Air Canada, Air Transat, Porter and WestJet have all accepted payroll support from the Canadian government's emergency wage subsidy program.

Related: First look onboard Air Canada's new Airbus A220