Feds won't mandate refunds

The federal government is not committing to a bailout of the Canadian airlines sector - but is also not planning to require air carriers to refund ticket holders for the flights cancelled during the COVID pandemic as some consumers have requested.

Speaking in Ottawa this morning, federal transportation minister Marc Garneau said mandating a reimbursement on a sector that has lost more than 90% of its revenue during the COVID lockdown would basically cripple an industry that’s of vital importance to Canada.

“It’s too essential for this country,” Garneau said of the airlines industry. “Canada is the second-largest country on Earth with vast distances and remote areas… and the airlines in this country are just as important as what we recognize today the importance of being connected by broadband Internet.

“I have enormous sympathy - and I understand the frustration of the people who preferred to have been reimbursed instead of having flight credits,” he added. “At the same time… if the airlines are required to reimburse all the tickets for the cancelled flights, the impact would be devastating.”

In recent weeks, Canadian consumer pressure has intensified on the likes of Air Canada and WestJet to offer full refunds instead of the flight vouchers current used for cancelled flights. A Change.org petition to lobby Ottawa to mandate a refund has gathered 58,283 signatures as of Friday.

However, the airlines have maintained their resistance; WestJet, for example, is offering flight vouchers usable within two years. Air Canada is refunding its refundable ticket holders, but those holding non-refundable tickets have been offered vouchers that don’t expire or conversion of credits into Aeroplan Miles.

In his morning news conference, Canadian Prime Minister Justin Trudeau echoed those sentiments.

“I hear clearly the concerns that Canadians have around their tickets,” he said. “We will continue to work with the industry and the concerned group of Canadians to ensure we find a fair way through this, but we know that Canadians at the same time want to ensure we continue to have an airline industry after this pandemic. Getting that balance right… is what we will do.”

On the airlines’ request for additional financial support from Ottawa, however, Garneau is less clear on Ottawa’s stance. The transport minister said there are already a number of wage subsidy and credit facility programs that airlines are eligible for, and he wanted to see how effective those programs are for airlines as they begin slow resumption of flights across the country this summer.

“There’s no question that the airline industry - and I include our airports and our air traffic controller - has been disproportionally hit by the pandemic,” Garneau said. “In some cases, their futures are in jeopardy, so we are monitoring the situation very carefully.”