Canada 3000, which learned late Thursday that it would get as much as $75 million in federal loan guarantees, said Friday it will soon ask federal competition authorities to declare Air Canada's new discount airline illegal. 
Air Canada announced its Tango service earlier this month. That service would see some of its aircraft and personnel re-deployed to a no-frills discount service beginning Nov. 1. 
Canada 3000's Kinnear was busy bashing Air Canada in his speech to the travel agents, accusing it of trying to drive its competitors out of business. 
Canada 3000's shares soared Friday after the federal government provided it with up to $75 million in loan guarantees. 
Canada 3000 shares closed up 95 cents at $4.10. 
Canada 3000 has slashed its flight schedules, cut staff and implemented pay cuts in response to its reduced business. 
"Canada 3000 offers the only alternative domestic jet service to many cities and regions in Canada," said transport minister David Collenette. 
Collenette said it's important to maintain Canada 3000 as a viable competitor to Air Canada. 
At the same time, he warned Air Canada that it would have to undergo some significant restructuring before it would be eligible for loan guarantees. 
Air Canada issued a statement saying it expected to be included in the government's loan guarantee program. "We look forward to working with the Government of Canada on establishing a stabilization package with comparable conditions so that Air Canada would not find itself competing with a selectively subsidized Canadian industry, as well as a massively subsidized U.S. industry," the airline said. 
The Globe and Mail reported Friday that Air Canada had hired BMO Nesbitt Burns to advise it on options to help it deal with its current debt and revenue crisis. 
Cabinet approved Canada 3000's loan guarantee on Thursday. Collenette said he expected the money would come from the government's general revenues for this fiscal year. 
John Lecky, chair of Canada 3000 Inc., said on Oct.15 the company could run out of cash by Christmas without the loan help. 
Early in October, Ottawa gave $160 million to Canadian carriers including Air Canada and Canada 3000 to compensate for temporary closure of airspace after the suicide hijacking attacks on Washington, New York and Pennsylvania. 
Collenette said he hoped and expected the federal loan guarantees wouldn't cost taxpayers because Canada 3000 will be able to repay its creditors. 
Written by CBC News Online staff