Ottawa grants Sunwing C $ 100 million loan for COVID repayments

The Canadian federal government will loan C $ 100 million (US $ 81.2 million) to parent company Sunwing Airlines (WG, Toronto Pearson) Sunwing Travel Group to reimburse COVID-19 customers.

The Canada Business Emergency Finance Corporation (CEEFC) and Sunwing Travel Group, in separate statements, announced on June 25 that they had reached an agreement whereby CEEFC would provide a repayable loan in the Large Employer Emergency Funding Mechanism (LEEFF) to allow Sunwing to issue refunds to eligible customers.

This repayable loan was separate from an existing LEEFF loan, agreed in February 2021, whereby CEEFC makes CAD 348 million ($ 282.5 million) in cash available to Sunwing Vacations Inc. and low cost carrier Sunwing Airlines. to protect jobs in Canada’s airline industry.

Under the latest agreement, Sunwing would expand its refund policy to offer refunds to eligible customers who have received travel credit due to cancellations resulting from the COVID-19 pandemic. This would apply to qualifying flights, hotels and vacation packages booked on or before June 25, 2021, for travel scheduled as of February 1, 2020. Sunwing would launch an online portal for customers to request refunds, which would be up to to August 27. , 2021, to request refunds under these updated terms.

LEEFF is providing bridge funding to Canada’s largest employers whose needs during the pandemic are not being met by private market funding. In line with key LEEFF principles, Sunwing has agreed to impose restrictions on executive compensation, dividends and share buybacks, CEEF said.

Ottawa has previously provided loans to Air Canada (AC, Montreal Trudeau) and Air Transat (TS, Montreal Trudeau) for operational and customer repayment purposes. Debt repayment talks are also underway with WestJet (WS, Calgary) and Porter Airlines (PD, Toronto City Center). It comes after Ottawa has been repeatedly criticized by the airline industry for failing to provide sector-specific financial assistance last year.

In April, Air Canada obtained access to CAD 4 billion (US $ 3.2 billion) in loans through LEEFF, under which CEEFC purchased CAD 500 million (US $ 405.5 million) of newly issued shares in the airline company. Air Transat will receive loan financing through LEEFF for a total amount of CAD 700 million (USD 567 million), of which CAD 310 million (USD 251 million) in the form of a repayable loan to finance COVID-19 repayments .

One of the largest integrated travel companies in North America, Sunwing Travel Group includes Sunwing Vacations and Vacation Express, two North American leisure tour operators; Sunwing Airlines; SunwingJets (Toronto Pearson), a luxury private jet charter service; and Vacation Express, a growing tour operator in the United States; and the travel retail companies and Luxe Destination Weddings. Blue Diamond Resorts is the Group’s hotel management company; while NexusTours is a full service destination management company. The group is 51% owned by the Hunter family, while the TUI group owns 49%.

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