Air Transat (TSX:TRZ) has become the latest airline to reach a deal with Ottawa on a federal bailout.
Air Transat parent company, Transat AT Inc., said it has reached a deal to borrow up to $700 million from the federal government. The money will come through the federal government's "Large Employer Emergency Financing Facility," the same program used to help Air Canada (TSX:AC).
Transat says $390 million will be used to help support its business, while $310 million will be used to provide reimbursements to travelers whose flights were cancelled because of pandemic imposed travel restrictions.
Air Canada and Transat announced earlier in April that the two Montreal-based companies had agreed to call off a deal that would have seen the country's largest airline buy its smaller rival.
Initiated two years ago, the takeover was priced at $720 million before shrinking to $190 million as Covid-19 hurt the transportation sector.
Air Canada pulled the plug on its offer to buy Air Transat on April 2.
