Sunwing Receives $375M Federal Emergency Loan to Preserve Jobs

Canada’s airline sector was dealt yet another blow, following Prime Minister Justin Trudeau’s latest ban on outgoing flights to warm destinations over fears of new Covid-19 strains. As a result of the additional constraints on air travel demand, Sunwing is one the first airlines to tap into the federal government’s emergency loan program.

According to government documents released Monday, Sunwing Airlines Inc, and Sunwing Vacations Inc, will have access to an additional $375 million in liquidity via the Large Employer Emergency Financing Facility (LEEFF) that is expected to go towards preserving jobs. The airline has already drawn $50 million from the facility, and has agreed to set aside cash already received from customers that had their flights cancelled as a result of the pandemic. However, it has yet to be determined what will happen to those prepaid amounts, as negotiations with the federal government are still ongoing.

The LEEFF program was first unveiled by the federal government in 2020 as a means of providing emergency liquidity to large Canadian companies that otherwise do not have access to traditional means of financing. The program offers loans over $60 million, and is available to employers that generate more than $300 million in revenue annually. The program has also been subject to criticism, given the relatively high interest rate, which starts at 5% annually, and then increases to 8% after one year. In addition, companies that receive the emergency funding must also disclose how their future operations align with national climate change goals.


Information for this briefing was found via Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Silver’s Finally Breaking the System | Keith Neumeyer – First Majestic

The Best News for Gold Was the Drop! – Peter Grandich

McEwen Copper: The Los Azules Feasibility Study

Recommended

Steadright To Conduct Multi-Phased Exploration At Historic Goundafa Polymetallic Mine

Goliath Resources Drills 10.72 g/t Gold Over 7.83 Metres At Surebet

Related News

Air Canada Senior Execs to Return 2020 Bonuses Following Ire From Ottawa

Despite receiving $5.9 billion in emergency government aid to help alleviate pandemic-related financial hardships, it...

Monday, June 7, 2021, 02:25:00 PM

Transat Borrows $700 Million From Canadian Government

Transat A.T. Inc. (TSX: TRZ) announced this morning that it has entered into an agreement...

Thursday, April 29, 2021, 08:31:20 AM

US Increases Tariffs on German and French Wines Over ‘Unfair’ Airbus Subsidies

The 16-year long battle between the US and the EU over aerospace subsidies to Boeing...

Thursday, December 31, 2020, 03:01:00 PM

IATA Expected to Launch Covid-19 Travel Pass by March

The International Air Transport Association (IATA) recently announced that it will launch its official Covid-19...

Thursday, February 25, 2021, 11:54:00 AM

Airline Groups Propose ‘Digital Health Passports’ in Leu of Quarantines as Pandemic Continues to Cripple Industry

As the recovery for air travel demand continues to be pushed back further and further...

Sunday, November 15, 2020, 03:42:00 PM