Canadian government approves CAD1.5bn loan guarantee for Bombardier aircraft

Airline Industry Information, Oct 29, 2004

AIRLINE INDUSTRY INFORMATION-(C)1997-2004 M2 COMMUNICATIONS LTD

The Canadian government has approved a CAD1.5bn loan guarantee that secures Air Canada's purchase of up to 45 aircraft from Canadian aerospace firm Bombardier.

The country's Transport Minister Jean Lapierre said that the guarantee would enable Bombardier to compete on a level playing field and also guarantees the completion of Air Canada's order. The move comes days after Lapierre insisted that the government would do all it could to make sure that Bombardier bases the production of its new aircraft in Canada despite offers from other countries.

The new loan guarantee means that Air Canada should now take up the 15 options on Bombardier CRJ aircraft as well as the 30 firm orders it already holds. The order would then match the 45 orders it has placed with Bombardier's main rival Embraer, reports Reuters.

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