Canadian government to provide loans for Air Wisconsin aircraft purchase

Airline Industry Information, Jan 11, 2001

AIRLINE INDUSTRY INFORMATION-(C)1997-2001 M2 COMMUNICATIONS LTD

The Canadian government has stated that it is willing to help Bombardier Inc, a Canadian aircraft manufacturer, to win a USD1.5bn aircraft order from Air Wisconsin by providing the airline with USD1.1bn in loans.

Brian Tobin, the Canadian Industry Minister, has stated that the decision was aimed at ending a trade war with Brazil over the provision of subsidies to Embraer, a Brazilian aircraft manufacturer competing with Bombardier Inc.

Speaking at a news conference on 10 January, Tobin stated: 'The only way to bring this impasse to a head and force compliance with the international trade rules is to stop Brazil from taking away sales that Bombardier would otherwise win, but for the illegal subsidies now being employed by Embraer.'

Tobin indicated that the loans and interest-rate package being offered to Air Wisconsin were similar to subsidies provided to Embraer by the Brazilian government according to Reuters.

Brazil has criticised the Canadian government's decision and claims that it is following rulings made by the World Trade Organisation after admitting to providing illegal subsidies to Embraer.

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