Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
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Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
https://www.newswire.ca/news-releases/l ... 25246.html
TORONTO, Feb. 1, 2021 /CNW/ - Today, the Canada Enterprise Emergency Funding Corp. (CEEFC) announced a new loan under the Large Employer Emergency Financing Facility (LEEFF). The agreement gives Sunwing Vacations Inc. and Sunwing Airlines Inc. access to $375 million of liquidity to protect jobs in Canada's airline sector.
Sunwing Airlines and Sunwing Vacations together provide almost 3,000 Canadians with full-time jobs.
Sunwing has agreed to maintain an account with money received from customers for travel that was cancelled due to the COVID-19 pandemic. This account will be maintained until the government's broader discussions with the airline industry conclude and a policy is established for the treatment of these prepaid amounts.
LEEFF loans provide bridge financing to Canada's largest employers whose needs during the pandemic are not being met through private market financing. It provides large Canadian employers with access to credit to preserve jobs and continue operations during this challenging period.
Other applications for LEEFF financing are currently under consideration. To protect the financial interests of taxpayers, rigorous due diligence and the collaboration of existing lenders is required.
CEEFC maintains an updated list of approved LEEFF loans, which can be found at https://www.ceefc-cfuec.ca/approved-loans/.
Key terms of the LEEFF loan facility can be found at https://www.ceefc-cfuec.ca/leeff-factsheet/.
TORONTO, Feb. 1, 2021 /CNW/ - Today, the Canada Enterprise Emergency Funding Corp. (CEEFC) announced a new loan under the Large Employer Emergency Financing Facility (LEEFF). The agreement gives Sunwing Vacations Inc. and Sunwing Airlines Inc. access to $375 million of liquidity to protect jobs in Canada's airline sector.
Sunwing Airlines and Sunwing Vacations together provide almost 3,000 Canadians with full-time jobs.
Sunwing has agreed to maintain an account with money received from customers for travel that was cancelled due to the COVID-19 pandemic. This account will be maintained until the government's broader discussions with the airline industry conclude and a policy is established for the treatment of these prepaid amounts.
LEEFF loans provide bridge financing to Canada's largest employers whose needs during the pandemic are not being met through private market financing. It provides large Canadian employers with access to credit to preserve jobs and continue operations during this challenging period.
Other applications for LEEFF financing are currently under consideration. To protect the financial interests of taxpayers, rigorous due diligence and the collaboration of existing lenders is required.
CEEFC maintains an updated list of approved LEEFF loans, which can be found at https://www.ceefc-cfuec.ca/approved-loans/.
Key terms of the LEEFF loan facility can be found at https://www.ceefc-cfuec.ca/leeff-factsheet/.
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Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
Pretty steep interest rate on those loans... This sounds more like desperation than a government bailout.
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Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
Perhaps. I think Sunwing is reading the tea leaves correctly here - it seems very apparent now a year into this crisis that no sector-specific aid package is coming for Canada's airlines. I suspect that the LEEFF loan (who comes up with these acronyms?) is going to be the closest thing to an aid package that our airlines will be able to access. Our current government appears to be hyper-focused on what they perceive to be the negative publicity that would arise from an "airline bailout" - especially after they've spent the last year using the airlines as a scapegoat for their role in the spread of COVID-19.Curiousflyer wrote: ↑Mon Feb 01, 2021 6:27 pm Pretty steep interest rate on those loans... This sounds more like desperation than a government bailout.
Sunwing has spent the better part of the last year struggling to stay afloat despite revenues being cut by 99%. How long could any company, big or small, survive in such a situation? The one chance to recoup some of the losses of the last year - the spring break travel season, which is normally Sunwing's highest-earning period of the year, has now been negated by a new act of government regulation. Now the question becomes one of survival, how to keep the airline solvent for at least the next six months to a year with travel restrictions still in place?
The interest rates are steep, to be fair, but Sunwing has had a track record of consistent profitability in normal times. I think the feeling is that it's better to take a bad deal now and live to fly another day, rather than wait for a good deal that never materializes. Loans and interest rates can always be re-negotiated once the crisis is over, but if the airline goes bankrupt in the meantime, I'd wager the outcome would be a much worse one for Sunwing's employees.
Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
It’s not a good sign for anyone thinking that we will get an aid package for Canadian airlines.
Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
Lender of last resort?
SWG is privately held. No public financials. Not sure that it has many meaningful unencumbered assets. Not sure it has many meaningful assets period. TUI probably has its own financial problems to deal with.
Pretty clear signal that time ran out. At least the doors will remain open even though the operation remains effectively closed.
Focus will now be winter 2021/2022.
Are many SW pilots leaving for Flair?
SWG is privately held. No public financials. Not sure that it has many meaningful unencumbered assets. Not sure it has many meaningful assets period. TUI probably has its own financial problems to deal with.
Pretty clear signal that time ran out. At least the doors will remain open even though the operation remains effectively closed.
Focus will now be winter 2021/2022.
Are many SW pilots leaving for Flair?
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Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
Sunwing is owned 49% by TUI. TUI (being public) has to disclose their partner's financials. If you want to look at Sunwing's financials, look at TUI's.
Sunwing airlines outright owns several 737's, but the big money-maker is the many hotels the travel group owns. The airline is just a cost-effective means to get passengers to the hotels, and the airline itself doesn't need to make any money. Sunwing's hotel portfolio is massive and still growing (just opened Planet Hollywood Cancun the other day). Lots of other vacation providers and carriers buy hotel rooms at these resorts from Sunwing.
None have left as far as I know.
Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
The interest rates are absurd:
Year 1: 5%
Year 2: 8%
Year 3: 10%
Year 4: 12%
Year 5: 14%
Year 1: 5%
Year 2: 8%
Year 3: 10%
Year 4: 12%
Year 5: 14%
Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
One can only presume that SWG will have a replacement lending facility in place no later than year 2.
Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
What makes any of you think Sunwing needs this right now?
Sunwing started the application for this 6 or 7 months ago, it has simply taken this long to get approved - and that's all it is....they have been approved. It doesn't mean they have to start drawing on it. It's just another tool in the chest they can draw on if the worst possible scenario happens. Can you imagine the company that decides we are dead in 2 months and need this loan - only to find out it takes 6 months to jump through all the hurdles? Sunwing is a company I would worry about the least right now.
Sunwing started the application for this 6 or 7 months ago, it has simply taken this long to get approved - and that's all it is....they have been approved. It doesn't mean they have to start drawing on it. It's just another tool in the chest they can draw on if the worst possible scenario happens. Can you imagine the company that decides we are dead in 2 months and need this loan - only to find out it takes 6 months to jump through all the hurdles? Sunwing is a company I would worry about the least right now.
The summer is actually looking really bright for us at this point (easily changed of course) and I would be hesitant about jumping ship to a company that is tripling the size of it's operation in the middle of a pandemic with next to no air travel. Doing so would be a giant red flag even before COVID - but now???? Why does everyone think Flair is the best bet right now? Because they are getting a bunch of new airplanes? We are getting a factory fresh airplane tommorow and another one on Thurs...doesn't mean much at the end of the day.Are many SW pilots leaving for Flair?
Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
There are significant number of Sunwing pilots applying. More than we can hire. I imagine Flair is attractive because we're actually flying and expanding and SWG pilots don't know when that will happen or if everyone will be called back or when. Sunwings factory fresh aircraft are parked on a ramp currently and very unlikely to move before fall of 2021.boeingboy wrote: ↑Tue Feb 02, 2021 12:47 pmThe summer is actually looking really bright for us at this point (easily changed of course) and I would be hesitant about jumping ship to a company that is tripling the size of it's operation in the middle of a pandemic with next to no air travel. Doing so would be a giant red flag even before COVID - but now???? Why does everyone think Flair is the best bet right now? Because they are getting a bunch of new airplanes? We are getting a factory fresh airplane tommorow and another one on Thurs...doesn't mean much at the end of the day.Are many SW pilots leaving for Flair?
If you're a junior SWG pilot recently hired and have significant experience you can come to Flair as a DEC with a seniority number under 100. That's a pretty attractive option compared to sitting as an FO at SWG for years. Combined with Flair not asking for SWG pilots to quit (while realizing some may choose to return in the fall of this year if SWG starts back up however they also have a type rating so training costs are minimal) it's a pretty attractive option for a pilot who is furloughed making a couple of grand a month on QEWS.
Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
Not requiring them to quit and letting them go back is certainly an awesome deal - good to know.There are significant number of Sunwing pilots applying. More than we can hire. I imagine Flair is attractive because we're actually flying and expanding and SWG pilots don't know when that will happen or if everyone will be called back or when. Sunwings factory fresh aircraft are parked on a ramp currently and very unlikely to move before fall of 2021.
If you're a junior SWG pilot recently hired and have significant experience you can come to Flair as a DEC with a seniority number under 100. That's a pretty attractive option compared to sitting as an FO at SWG for years. Combined with Flair not asking for SWG pilots to quit (while realizing some may choose to return in the fall of this year if SWG starts back up however they also have a type rating so training costs are minimal) it's a pretty attractive option for a pilot who is furloughed making a couple of grand a month on QEWS.
As for our planes - 4 are back east and 2 at Boeing - being delivered tommorow. Yes they will sit until the flying starts again - but are you telling me yours won't? Your going to go from 3 airplanes to 13 and your going to fly them all? I have serious doubts there is that much business right now. See my above comments about expanding too quickly.
Don't be so sure about that. Anything can happen.very unlikely to move before fall of 2021.
Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
Nope, not sure. Things change weekly right now in this industry. But its a likely scenario that there won't be significant SWG operations until winter. Domestic demand will rebound before international sun destinations which isn't a huge demand in the summer on a normal year.boeingboy wrote: ↑Tue Feb 02, 2021 1:08 pmNot requiring them to quit and letting them go back is certainly an awesome deal - good to know.There are significant number of Sunwing pilots applying. More than we can hire. I imagine Flair is attractive because we're actually flying and expanding and SWG pilots don't know when that will happen or if everyone will be called back or when. Sunwings factory fresh aircraft are parked on a ramp currently and very unlikely to move before fall of 2021.
If you're a junior SWG pilot recently hired and have significant experience you can come to Flair as a DEC with a seniority number under 100. That's a pretty attractive option compared to sitting as an FO at SWG for years. Combined with Flair not asking for SWG pilots to quit (while realizing some may choose to return in the fall of this year if SWG starts back up however they also have a type rating so training costs are minimal) it's a pretty attractive option for a pilot who is furloughed making a couple of grand a month on QEWS.
As for our planes - 4 are back east and 2 at Boeing - being delivered tommorow. Yes they will sit until the flying starts again - but are you telling me yours won't? Your going to go from 3 airplanes to 13 and your going to fly them all? I have serious doubts there is that much business right now. See my above comments about expanding too quickly too soon.
Don't be so sure about that. Anything can happen.very unlikely to move before fall of 2021.
We aren't bringing in 13 tails on day 1. Capacity will increase to meet demand and route planning requirements.There isn't much demand right now, however as summer arrives and more of the population is vaccinated we're anticipating that to change. I'd say its much more likely for a canadian domestic ULCC to be able to fill aircraft this summer than a sun destination vacation airline.
I hope I'm wrong and you guys all deploy with 40 aircraft to Europe this summer and everyone is recalled and we all go back to doing what we love.
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Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
Thanks. I hope all your endeavors work out as well. Our summer deployments as of this hour look really good. Even better than other years.
A minor correction though....our core fleet is only 14 aircraft. A godsend during these times. The 44 aircraft we fly in the winter is a combination of our core fleet and the seasonal leases from TUI and Smartwings.
A minor correction though....our core fleet is only 14 aircraft. A godsend during these times. The 44 aircraft we fly in the winter is a combination of our core fleet and the seasonal leases from TUI and Smartwings.
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Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
Sunwing has steady drawn $50 million. That $2,500,000 interest on the initial $50 million drawn is starting to accrue as of yesterday.
Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
I’m starting this by saying I hope everything works out for sunwing.
If you are TUI though you are losing billions of dollars so why would you put money into an airline that is also losing money when your core business of resorts is hurting so bad? You can charter lift and still get them into your hotels and resorts.
If you are TUI though you are losing billions of dollars so why would you put money into an airline that is also losing money when your core business of resorts is hurting so bad? You can charter lift and still get them into your hotels and resorts.
Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
Thanks - I'm pretty sure we will come through this fine.I’m starting this by saying I hope everything works out for sunwing.
It's not that simple.If you are TUI though you are losing billions of dollars so why would you put money into an airline that is also losing money when your core business of resorts is hurting so bad? You can charter lift and still get them into your hotels and resorts.
Besides - bookings in Europe for summer are going through the roof. Hopefully - the industry is getting back to business.
Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
Sunwing tour group is 49% owned by TUI. Vacation express is owned by Sunwing. Blue diamond hotels is also separate. I’m not sure what % TUI has of the hotels.
The hotels were the largest liability until the fall when they started reopening. Now they’re the largest asset. The hotels are full of Americans, Europeans and locals back making money again.
For large airlines in Canada we have the lowest hibernation costs by a long shot. As Boeing boy said Europe is looking likely for Sunwing deployments. We’re cashed up to get through anything now.
Unless a sector bailout comes, I’ll take Sunwing’s odds over anyone else’s at this point.
The hotels were the largest liability until the fall when they started reopening. Now they’re the largest asset. The hotels are full of Americans, Europeans and locals back making money again.
For large airlines in Canada we have the lowest hibernation costs by a long shot. As Boeing boy said Europe is looking likely for Sunwing deployments. We’re cashed up to get through anything now.
Unless a sector bailout comes, I’ll take Sunwing’s odds over anyone else’s at this point.
Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
That’s good news, I’m hoping the busy summer overseas materializes for you guys.
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Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
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Re: Sunwing Airlines Gets $375 Million LEEFF Loan to Protect Canadian Jobs
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