A plane is seen through the window on the tarmac of Vancouver International Airport as the waiting room is empty Tuesday, June 9, 2020. Canadians are awaiting details on Air Canada’s plans for ticket refunds after the airline reached a deal for $5.9B in federal aid. THE CANADIAN PRESS/Jonathan Hayward

A plane is seen through the window on the tarmac of Vancouver International Airport as the waiting room is empty Tuesday, June 9, 2020. Canadians are awaiting details on Air Canada’s plans for ticket refunds after the airline reached a deal for $5.9B in federal aid. THE CANADIAN PRESS/Jonathan Hayward

Air Canada’s government aid deal needs stricter terms, passenger advocate says

Advocate says no guarantee that refunds will actually come through

One of Canada’s best-known advocates for passenger rights said Tuesday that taxpayers don’t have enough security in the $5.9-billion aid deal struck by Ottawa and Air Canada even as the airline began rolling out new refunds to ticket holders unable travel due to the COVID-19 pandemic.

One of the deal’s flaws is a $1.4-billion unsecured government loan to provide those refunds to customers with unused, non-refundable tickets and vacation packages, said Air Passenger Rights founder Gabor Lukacs.

Because it’s an unsecured loan, there would be “no real way” to seize assets if the company defaults on its repayments, Lukacs said.

In addition, the government gets just six per cent of Air Canada’s total equity in return for $500 million, he noted, compared with a 20-per-cent Lufthansa stake for the German government.

“Overall, we see a … public message that, in Canada, it is acceptable to misappropriate consumers’ money, and there will be no consequences,” Lukacs said in a phone interview.

That characterization of the deal was disputed by Finance Minister Chrystia Freeland when she announced the agreement on Monday evening.

“Taxpayers aren’t footing the bill,” Freeland told reporters. “This is a loan facility, and the Government of Canada fully expects to be paid back.’

The federal aid package comes after months of negotiations between Ottawa and an airline industry that has been devastated by the lack of passenger air travel during the pandemic.

Air Canada’s passenger numbers declined 73 per cent in 2020 following several years of record growth for the airline. During 2020, it reduced staff by more than 20,000, more than half of the pre-COVID total, then cut another 1,700 employees in January.

The Montreal-based company posted a staggering $1.16-billion loss in the fourth quarter of last year, a result that caps off what the carrier’s then-CEO called the “bleakest year in aviation history.”

Aside from the ticket refunds, the deal includes a number of other conditions for Air Canada to meet.

The country’s biggest airline has committed to resume service at 13 regional airports as well as seven others through agreements with regional carriers.

It has also agreed to cap executive compensation, to stop dividend payments and share buybacks, to maintain staffing levels and to complete previously planned aircraft purchases of the Airbus A220 — formerly Bombardier Inc.’s C Series — manufactured in Quebec.

“Given the upcoming April 19th federal budget, we had been anticipating some form of announcement,” ATB Capital Markets analyst Chris Murray said in a note to clients.

“Overall, we see the package as fair and manageable … ensuring Air Canada is well-positioned to emerge post-COVID to support a return to travel.”

Travellers who weren’t able to use their non-refundable tickets and vacation packages bought between Feb. 1, 2020 and April 13, 2021 can immediately request refunds, which the carrier says it will process as quickly as possible.

“Air Canada will be offering refunds to all eligible customers whether they cancelled their ticket or if their flight was cancelled by the airline,” Air Canada chief operating officer Lucie Guillemette said in a statement.

Customers who have already accepted a travel voucher or Aeroplan points instead of cash will also have the option to exchange these for a refund, it said.

The airline said it has already provided $1.2 billion to customers with refundable tickets, which are usually more expensive than their non-refundable equivalents..

Air Canada said customers can submit refund requests online or through their travel agent. The airline will accept online refund requests until June 12 at www.aircanada.com/refund.

Air Canada has also revised booking policies for all future travel, starting Tuesday, to provide more certainty if a flight is cancelled or rescheduled by more than three hours.

All customers will have the choice of receiving a refund, an Air Canada Travel Voucher or the equivalent value in Aeroplan Points with a 65 per cent bonus, the company said in a statement.

READ MORE: Air Canada refunds en route after $5.9B deal for federal government aid

David Paddon, The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Air CanadaAir TravelCoronavirus

Just Posted

The City of Nanaimo has developed concepts for an extension of the Harbourfront Walkway from Departure Bay ferry terminal to Departure Bay Beach. (City of Nanaimo image)
LETTER TO THE EDITOR: City hasn’t shown it has capability to build walkway

Is it really a good idea to consider a hyper-expensive, complicated mega-project, asks letter writer

Regional District of Nanaimo directors discussed asking the provincial government for increased funding, awareness and enforcement against human trafficking. (File photo)
Regional District of Nanaimo asking province to better address human trafficking issue

Directors agree to write to the premier and solicitor-general after hearing from advocate

Conductor Willi Zwozdesky and pianist Nico Rhodes led 66 local vocalists in song for the Nanaimo Sings video project Keeping Calm and Singing On. (YouTube screen shot)
Nanaimo Sings virtual performance features 66 vocalists

Fifth Nanaimo Sings festival was to have taken place this year

The bow-legged bear was seen roaming 2nd Avenue on Friday, May 7 and again in Brown Drive Park on May 13. (Submitted photo)
Bow-legged Ladysmith bear euthanized after vet examination

CO Stuart Bates said the bear had obvious health issues

Queen Elizabeth II and Clive Holland, deputy commonwealth president of the Royal Life Saving Society, top left, virtually present Dr. Steve Beerman, top right, with the King Edward VII Cup for his drowning-prevention work. Tanner Gorille and Sarah Downs were honoured with Russell Medals for their life-saving resuscitation. (Buckingham Palace photo)
UPDATE: Queen presents Nanaimo doctor with award for global drowning prevention

Dr. Steve Beerman receives Royal Life Saving Society’s King Edward VII Cup

A vial of AstraZeneca vaccine is seen at a mass COVID-19 vaccination clinic in Calgary, Alta., Thursday, April 22, 2021. Dr. Ben Chan remembers hearing the preliminary reports back in March of blood clots appearing in a handful of European recipients of the Oxford-AstraZeneca COVID-19 vaccine. THE CANADIAN PRESS/Jeff McIntosh
Science on COVID, VITT constantly changing: A look at how doctors keep up

While VITT can represent challenges as a novel disorder, blood clots themselves are not new

Poached trees that were taken recently on Vancouver Island in the Mount Prevost area near Cowichan, B.C. are shown on Sunday, May 10, 2021. Big trees, small trees, dead trees, softwoods and hardwoods have all become valuable targets of tree poachers in British Columbia as timber prices hit record levels. THE CANADIAN PRESS/Jen Osborne.
Tree poaching from public forests increasing in B.C. as lumber hits record prices

Prices for B.C. softwood lumber reached $1,600 for 1,000 board feet compared with about $300 a year ago

The warm weather means time for a camping trip, or at least an excursion into nature. How much do you know about camps and camping-related facts? (John Arendt - Summerland Review)
QUIZ: Are you ready to go camping?

How many camp and camping-related questions can you answer?

Sinikka Gay Elliott was reported missing on Salt Spring Island on Wednesday, May 12. (Courtesty Salt Spring RCMP)
Body of UBC professor found on Salt Spring Island, no foul play suspected

Sinikka Elliott taught sociology at the university

A driver was taken to hospital after crashing a pickup truck into a tree on Rutherford Road near Bradbury Road on Friday, May 14. (Chris Bush/News Bulletin)
Driver taken to hospital after crashing truck into tree on Rutherford hill in Nanaimo

RCMP investigating incident at Rutherford and Bradbury roads on Friday, May 14

Tamara Cameron, Uplands Park Elementary School music teacher and librarian, students Ben Leduc, second from left, Avery Kojima and Kinley Robson, as well as other music students from the school, will benefit from $8,000 from MusiCounts, for instruments and recording equipment. (Karl Yu/News Bulletin)
Money for new instruments music to ears of Uplands Park school staff and students

Grant from music education charity MusiCounts means students will have more ways to be creative

Sarah Boileau in her home studio on Monday, May 10. Boileau’s work will be on display at the McMillan Arts Centre in Parksville through May 30. (Submitted photo)
RCMP arrested a man in north Nanaimo who wound up empty-handed after allegedly failing at shoplifting, bank robbery and robbery at ATM machine. (File photo)
Man arrested in Nanaimo after failed attempts at bank robbery, ATM mugging, shoplifting

RCMP arrest suspect in office-supply store after ‘short-lived crime spree’

Most Read