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Canada Offers Airlines Loans of $107 Million Amid Surging Jet Fuel Costs

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The Government of Canada has launched a loan program of up to CA$150 million ($107.61 million) per airline for Canadian carriers grappling with elevated jet fuel prices, the Department of Finance said Monday.

The Liquidity for Airline Sector Resilience facility under the Canada Enterprise Emergency Funding Corp. will offer eligible Canadian airlines "experiencing significant financial pressures" repayable liquidity support, according to the statement.

The initiative aims to alleviate pressures from higher fuel costs, which have "significantly" raised operating costs across the aviation sector.

"Airlines that receive support through this new loan program would have to commit to Buy Canadian, restrict dividends and executive compensation, and maintain their Canadian operations-including protecting jobs," the department said.

Following the onset of conflict in the Middle East, which led to a surge in oil prices, the government earlier suspended federal fuel excise taxes from April 20 through Sep. 7.

This reduces the cost for aviation fuel by CA$0.04 per liter, and cuts gasoline and diesel prices by CA$0.10/L and CA$0.04/L, respectively.

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