Canada's transport minister says he won't offer any cash to help Air Canada get on its feet, but will consider other forms of help.

David Collenette was reacting to published reports that the federal government is preparing a multimillion-dollar bailout package.

"All I've said as a basic principle is that if we can help in any way then we're prepared to discuss it with Air Canada," Collenette said Monday. "But we're not interested in a cash bailout of the airline."

David Collenette
David Collenette

Chance of loan guarantees

While there may be no cash bailout, senior sources say Ottawa is willing to give Air Canada about $300 million in loan guarantees.

But first, they say, Air Canada must file for bankruptcy protection, come up with the mandatory restructuring plan, and agree to uphold the Official Languages Act.




There's also speculation that Air Canada would have to sell some of its planes, cut some routes and renegotiate contracts with its unions.

The Canadian Autoworkers Union provided some relief Monday when it agreed to temporarily slash more than 1,000 jobs.

Air Canada's competitors aren't happy about the prospect of a government bailout of the national airline.

"Air Canada can't be all things to all people any more," said Clive Bedoe, the president of Westjet. "Jazz, its commuter collector, lost $90 million last year. You can't keep doing that."

The post-September 11, 2001 slowdown and now the SARS outbreak have compounded Air Canada's problems.