Canadian airlines could ‘fail’ if forced to refund passengers, says transport ministe…

“At the same time, if airlines had to immediately reimburse all cancelled tickets, it would have a devastating effect on the air sector, which has been reeling since the COVID 19 pandemic started.”

Garneau was doubling down on a message he delivered to the House of Commons’ pandemic committee on Thursday, when he warned MPs that if airlines “had to reimburse at this time, some of them could fail.”

The minister said today it’s his responsibility to help Canada’s airlines survive the pandemic.

“It is so essential for this country,” he said. “This is the second largest country on Earth, with its distances and remote areas, and we expect and need an airline industry in this country.”

Watch | Reporters question Marc Garneau about airline ticket refunds

But his response isn’t sitting well with Canadians struggling financially during the pandemic who argue it’s their right as consumers to get their money back for flights they never took.

“It’s very disappointing and frustrating,” said Tammie Fang, an health care essential worker in B.C. “My rights as a consumer have been put aside to help balance the airline industry.”

Fang works at a New Westminster hospital assisting with open-heart surgeries. She said she spends much of her spare time calling and emailing Air Transat seeking a refund of roughly $500 for a flight to Toronto she never took. She describes it as an extra burden during an already stressful and financially challenging time.

“It’s disheartening,” she said. “It’s unbelievable how much effort we have to put in.”

Airlines’ survival versus consumers’ rights

Canada’s airline industry has been hit hard particularly hard by the pandemic, and most of the country’s airline fleet is sitting idle at airports across the country. Airlines are losing 90 per cent of their normal revenue streams and some have put their operations completely on pause.

At the same time, pressure is mounting on the federal government to step in and force airlines to pay back passengers who also are struggling financially. Two petitions with more than 30,000 signatures combined have been submitted to Parliament in recent weeks calling on the government to demand that airlines tapping into taxpayer-funded government supports reimburse grounded passengers.

Billions tied up in refunds

For the most part, Canadian airlines are offering those passengers travel vouchers redeemable for two years. Air Canada also announced last week that it’s allowing people to transfer their tickets to others, which could permit ticket holders to sell them. The Canadian Transportation Agency has said offering vouchers could be a reasonable measure in the current circumstances.

Air Canada’s books are open, since it’s a publicly traded company. It has about $2.6 billion tied up in ticket sales for future travel over the next year.

Garneau’s office said the industry-wide figure is in the billions of dollars. When CBC asked Transport Canada for specific numbers, it was told the figures the government receives from airlines amount to proprietary information that it isn’t authorized to release.

Government in talks with airlines and consumers

Outside Rideau Cottage today, Prime Minister Justin Trudeau repeated a message he’s delivered in the past — that the government has to strike the right balance between keeping airlines afloat and preserving consumer’s rights. 

“I hear clearly the concerns that Canadians have around their air tickets,” said Trudeau. “We will continue to work with the industry and with concerned groups of Canadians to ensure that we find a fair way through this. 

“But I know Canadians at the same time want to make sure we continue to have an airline industry after this very difficult pandemic.”

The government is in talks with airlines and is looking to see what other countries have done with travel refunds. It’s expected to deliver an update on the file in the coming weeks.