Air Canada and the federal government have reached an agreement on a $5.9-billion aid package that the company says will speed up customer refunds, protect industry jobs and return service to some communities that were shuttered due to the COVID-19 pandemic.

In a news release, Air Canada said the $5.879-billion liquidity agreement includes $4 billion in loans, a $500 million investment in Air Canada shares and a separate $1.4-billion loan to help facilitate customer refunds.

As part of the agreement, Air Canada has agreed to several stipulations:

“The additional liquidity program we are announcing today achieves several aligned objectives as it provides a significant layer of insurance for Air Canada, it enables us to better resolve customer refunds of non-refundable tickets, maintain our workforce and re-enter regional markets,” Michael Rousseau, Air Canada president and CEO, said in a news release. 

“Most importantly, this program provides additional liquidity, if required, to rebuild our business to the benefit of all stakeholders and to remain a significant contributor to the Canadian economy through its recovery and for the long term.”

The Liberals have long said sector-specific support would be contingent on airlines refunding passengers with tickets rendered useless following the cancellation of flights. International and domestic travel, while not prohibited, is highly discouraged at this time.

In February, the airline announced it was cutting another 1,500 jobs and suspending 17 U.S. and international routes. The month prior, it cut around 1,700 jobs. In total, the company has axed more than half its workforce since last March.

Four Canadian airlines, at the request of the federal government, agreed to suspend all flights to Mexico and the Caribbean until April 30 due to the spread of COVID-19 and its variants.

The news comes as the Liberal government is set to unveil their highly-anticipated spring budget on April 19. In their November 2020 fall economic statement, $206 million was earmarked to support regional air transportation, but the government did not provide details of aid for large carriers.

In a statement reacting to last November’s funding, the National Airlines Council of Canada’s (NACC)  CEO Mike McNaney said “NACC members have spent years and invested billions of dollars building regional and international networks to create the level of connectivity needed to support hundreds of thousands of jobs across the country and in every sector of the economy. Those jobs and investment are now being eroded, as is Canada’s ability to establish an overall path to recovery.”

In early March, Unifor President Jerry Dias told CTV News Channel’s Power Play that the airline aid package is expected to surpass an original target of $7 billion.

“It originally was $7 billion for the entire industry over 10 years at one per cent interest, that was quite a while ago. Of course now we’re dealing with regional issues and we’re dealing with of course the repayment of the customers, so I would expect now that the $7 billion is the floor, not the ceiling,” he said at the time.

This content was originally published here.