Oil & Gas

The Canadian government has introduced a new loan program aimed at helping domestic airlines cope with rising fuel costs and continue supporting jobs and operations. According to the Finance Ministry, eligible carriers will be able to access repayable liquidity support of up to C$150 million ($107.5 million) as the aviation sector faces mounting financial pressure.

Airlines around the world have been struggling with sharply higher jet fuel prices triggered by the conflict involving Iran. The surge in operating costs has squeezed profit margins, weakened balance sheets, and raised concerns about the sustainability of airline operations. In response, several governments are exploring measures to support their national carriers and maintain affordable air travel for consumers.

Under the Canadian initiative, airlines receiving assistance will be required to limit executive compensation and maintain their domestic flight services. The government stated that the program is designed to provide immediate financial relief to the aviation industry during what it described as an unprecedented global fuel-price shock.

However, the proposal has drawn criticism from some industry players. WestJet argued that government loans could distort market competition and called instead for policies that would strengthen the long-term sustainability of the aviation sector. Meanwhile, Air Canada said its strong financial position allows it to manage the impact of higher fuel costs. In the United States, officials have also expressed reluctance to provide airline bailouts, encouraging carriers to seek support from private markets instead.