Air Canada bailout welcome news for Labrador, Gander air industries

·3 min read
MP Yvonne Jones said air service in Labrador is not a privilege but an essential service. (Katie Breen/CBC - image credit)
MP Yvonne Jones said air service in Labrador is not a privilege but an essential service. (Katie Breen/CBC - image credit)
MP Yvonne Jones said air service in Labrador is not a privilege but an essential service.
MP Yvonne Jones said air service in Labrador is not a privilege but an essential service.(Katie Breen/CBC)

Following the federal government's announcement of a $5.4-billion bailout for Air Canada, people in Newfoundland and Labrador's beleaguered air travel sector are hoping the money helps the industry take off.

Labrador MP Yvonne Jones says the airline's commitment to bringing back service to areas like Labrador will mean restoring a lifeline that Northern communities need.

"Air service in Labrador is not a privilege; it's an essential," she said. "It's what brings food, supplies, medical equipment, personnel, everything in and out of our communities."

The relief package announced Tuesday for the nation's biggest airline will come in the form of low-interest loans and a $500-million equity stake in the airline.

The package comes with conditions, including a commitment to retain jobs, refund would-be travelers for cancellations due to the COVID-19 pandemic, and reinstate regional air services. Jones said with this deal, Air Canada expects to be up and running in Happy Valley-Goose Bay by June 1.

Reg Wright, CEO of the Gander Airport Authority, glad to hear regional services were included in negotiations.
Reg Wright, CEO of the Gander Airport Authority, glad to hear regional services were included in negotiations. (CBC)

While there isn't a deadline yet for when service will be returned to Wabush, Jones said Air Canada has agreed to work with other carriers to replace services they cancelled, including to that community.

Jones said the idea of the government taking over a large portion of the airline is an opportunity for both the federal and provincial governments to get involved in providing what she says is an essential service.

"If we cannot afford that service going forward, and the airlines can't afford to provide that service, then there's a role here for both the provincial and the federal government to step up," said Jones.

"Essential air services are needed right across Canada's North.… They need to be affordable, they need to be available, and it's the only transportation connection that people have."

Welcome news for embattled airport

While service cuts have hit Labrador particularly hard, the reinstating of routes is also good news for Newfoundland, says the CEO of the Gander International Airport Authority.

Air Canada will receive $5.4 billion in federal bailout.
Air Canada will receive $5.4 billion in federal bailout. ( Graham Hughes/The Canadian Press)

Reg Wright said he was happy to see a focus on regional routes included in the negotiations.

"When you're dealing with taxpayer money, the real interest that the federal government would have in this issue is that national air services be solvent, but also in the nation-building exercise that air service is provided in Canada," said Wright.

"It's really not just about enriching the value of Air Canada; it's about the connections that hold us together as a country."

Coming after a year of doom and gloom, Wright said, the bailout is welcome news alongside PAL Airlines and other providers committing to new, broader services.

"It's good to see WestJet committing to coming back to Gander. It's good to see Sunwing looking at a summer schedule," Wright said.

"But the success of it is really going to be dependent on the extent to which quarantine has been lifted for the summer, where we are with the bubble, and that has a direct bearing on demand."

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