First Air (Carp) Vice President (Commercial), Bert van der Stege, has confirmed the Northern Canadian carrier has applied to the government for CAD42 million (USD33 million) in funding. Speaking to CBC News, van der Stege did, however, deny First Air was looking for a bailout preferring instead to label it a loan.
"This is a loan," he said. "This is not a contribution or a subsidy. This is a loan that the government makes available to businesses."
First Air operates a dated fleet of six ATR42-300(QC)s, three ATR42-300s, five ATR42-500s, two ARJ-85s (operated by partner Summit Air Charters (SUT, Yellowknife)), two B737-200Advs, one B737-200(M), one B737-400, and three B737-400(M)s on flights connecting thirty-four communities within Nunavut, Nunavik and the Northwest Territories to Edmonton International, Winnipeg International, Ottawa International, and Montréal Trudeau.
In January, First Air applied to Canada's Parliamentary Standing Committee on Finance for a total of CAD42 million to be disbursed over two years beginning in 2016/17. The funds will be wholly allocated to acquiring and customizing nine ATR42-500s to replace First Air's nine outgoing ATR42-300s which, at an average age of 26 years, have now surpassed their useful economic lifespans.
In its submission, First Air argued that as Northern and Aboriginal communities have high levels of poverty, funding fleet replacement costs through significant price increases would not be an option. In addition, failure to meet these expenses would result in First Air dramatically reducing the volume and frequency of flights or the elimination of services to a number of communities, it warned.
According to van der Stege, First Air earlier this year managed to secure a small loan from the Business Development Bank of Canada (BDC) to cover the cost of one new aircraft.
Canadian operators have also been heavily affected by the downturn in the petroleum and mineral markets in the past two years.
