Porter draws C$125M federal fuel loan as Iran conflict spikes jet prices
What's the deal? Porter Airlines has borrowed C$125 million (roughly $91 million) through a federal emergency financing program run by the Canada Enterprise Emergency Funding Corporation (CEEFC). The debt comes as surging jet fuel prices squeeze Canadian carriers. Air TransatDealroom has a profile for this one. Try Dealroom → operator Transat tapped the same program for C$150 million, the maximum available, bringing the combined total to C$275 million.
Why now? Jet fuel prices have climbed sharply amid the US war with Iran, which has disrupted oil shipments through the Strait of Hormuz and cut regional refining capacity. The Strait historically carries about 20% of the world's oil. Prices rose 9% last week alone, per S&P GlobalDealroom has a profile for this one. Try Dealroom →, with European jet fuel averaging nearly US$4.29 per gallon.
The terms: CEEFC launched the program in June to give passenger airlines liquidity against fuel cost volatility. The loans carry four-year terms at roughly 3.5% — the yield on 10-year Government of Canada bonds when the program was announced — plus 50 basis points. The program remains open until November.
What's the catch? Both airlines are still repaying pandemic-era federal loans. Porter borrowed C$250 million during COVID-19, plus C$20.5 million for passenger refunds. Transat borrowed C$893 million; in 2025 Ottawa cut roughly C$400 million of that in exchange for C$41 million and rights to voting shares of up to 19.9%.
Who's not in? Air CanadaDealroom has a profile for this one. Try Dealroom → and WestJetDealroom has a profile for this one. Try Dealroom → skipped the fuel program. WestJet, which took no pandemic aid, called the initiative "market-distorting," arguing policy should instead support a sector where airlines "compete on their own merits." Air Canada has repaid its government loan.
The signal: The loans land in the lower quarter of comparable deals by size — modest sums relative to the sector's pandemic borrowing. But they show smaller carriers leaning on state support to weather external shocks, while larger rivals argue the market should absorb them. With oil up about 8% in September on renewed Middle East conflict, and many passengers flying on tickets bought before the spike, the fuel squeeze is unlikely to ease soon.
Read more: paxnews.com
Image credit: BriYYZ
