Transat Secures Up to $150 Million Federal Lifeline Amid Fuel Crisis
AI-generated image · Bay Street Wire
The Montreal-based travel company will draw on government loans to offset soaring jet fuel costs, a move opposed by WestJet.
Transat A.T. Inc. has secured up to $150 million in federal aid to mitigate the impact of rising jet fuel prices driven by the war in the Middle East, according to reporting from CityNews Toronto.
The Montreal-based operator of Air Transat will receive the loan in monthly tranches, with an initial $125 million disbursement scheduled for Tuesday. The total amount of the loan is contingent on the difference in fuel costs between the upcoming months and the same period from the previous year, concluding on Oct. 31. The agreement carries a four-year timeline and an annual interest rate of 3.91 per cent.
This financial assistance follows a broader loan program announced by Ottawa seven weeks ago for airlines facing high oil prices, reduced flight schedules, and diminished profit forecasts. While Transat is tapping into the fund, other major carriers have taken different stances. Air Canada indicated earlier this summer that it would not require the aid. Meanwhile, WestJet expressed strong opposition to the government's intervention, citing its market-distorting effects.