Canadian Government announces aid for airline industry

The Canadian Government says it will provide CA$160m(around £50m) in emergency aid for the airline industry.

Transport Minister David Collenette called the money a first step in a broad policy to restructure the Canadian air industry.

He said it will compensate air carriers for losses from the temporary shut down of airports after the September 11 terrorist attacks in New York and Washington.

Collenette said the amount was decided after studying financial information from the airlines but is a fraction of the $15bn that the U.S. Congress has authorized for US airlines,

Air Canada, the nation's dominant carrier, has already announced 5,000 job cuts, on top of 4,000 announced prior to the attacks. It also reduced its flight schedule by 20 percent and removed 84 aircraft from its fleet.

Robert Milton, Air Canada's chief executive officer, said the entire Canadian air industry faced possible collapse because of sharp reductions in ticket sales.

Milton had said Canadian airlines needed as much as CA$4 billion (around £2bn) in government help.