CALGARY -- The federal government announced Monday it will roll out a new multi-million dollar loan program aimed at providing financing access to large employers impacted by COVID-19.

Questions remain however as to which companies may take advantage of the minimum $60 million loans — including airlines which have lost billions in airfare revenue.

Calgary-based WestJet announced extended flight cancellations into early July as it continues to deal with record low passenger numbers, but said in a statement it will weigh its options.

“WestJet acknowledges the creation of the Large Employer Emergency Financing Facility (LEEFF) and we will review the program specifics to determine our next steps,” read the statement.

“In the meantime, we continue to do everything we can to mitigate the impacts on our operations and the critical investments we make that are essential to Canadian communities.”

Nearly three quarters of WestJet’s aircraft are grounded due to COVID-19 and some say the costs are piling up at an astronomical rate.

“The aviation sector has been waiting for this announcement for at least six weeks and there is no way any airline’s business plan could accommodate anything approaching that sort of circumstance,” said aviation analyst Rick Erickson.

“Without question the world’s airline industry is hemorrhaging right now with little revenue coming in and massive amounts of fixed costs," added Erickson. "You have billions of dollars worth of fleets, contacts with airports around the world and ongoing maintenance. We’re talking a very large sum of money.”

Air Canada, which is roughly twice the size of WestJet has already announced it lost $1 billion in the first quarter of 2020.

Meanwhile, WestJet has laid off 11,000 out of its 14,000 employees. Thousands have been hired back through the federal wage top up, but some observers suggest more funding may be needed.

“I think this LEEFF benefit could help in the short term and more importantly it will keep employees working,” said Mount Royal University political analyst Duane Bratt.

“But because there’s two major airlines, I can see some specialized programs for both of them because you hear from WestJet that this may continue for years.”

The province of Alberta is optimistic that the funding will help large companies recover, but Finance Minister Travis Toews is still waiting for more details on when companies could receive such loans.

“Again there are a number of details to be worked out,” Toews said.

“We’ll be listening to industry and working with the federal government to ensure that this bridge financing is in fact accessible (and) timely because we know some businesses don’t have a lot of runway.”

'Normal' travel levels

A new survey from the Conference Board of Canada suggests that domestic air travel won’t return to a relative normal level until April of 2021.

Meanwhile, international travel will likely not return to usual volumes until December 2021 or early 2022.

The results came from a total of 3,500 respondents.

Passenger rights activists like Gabor Lukacs suggest that the downward trend could continue much longer, noting that many customers have been offered travel credit — not refunds — on flights cancelled due to COVID-19.

“Even if tickets were as cheap as before, passengers have good reason to be hesitant because airlines are trying to steal their money,” he said.

“Any kind of plan to restore some normalcy has to start with giving people back their money," Lukacs added. "It’s not a moral imperative, but an economic imperative.”

Meanwhile, higher prices could mean the death of discount or smaller airlines struggling to compete with their low prices.

Erickson suggests that some of these outfits could be counting on equitable government aid to help their airlines survive.

“It’s going to be a huge challenge and I don’t know if any of them have $300 million a year in revenue,” he said.

“I think what’s going to happen is that there will be air travel, but almost on a ‘must-go’ need.”