Trudeau addresses growing frustration with airlines over refund policies

Trudeau addresses growing frustration with airlines over refund policies
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OTTAWA — Prime Minister Justin Trudeau says the government will look at the issue of airlines offering travel vouchers rather than refunds to passengers who have had their flights cancelled due to the COVID-19 pandemic.

“We need to have some very careful discussions with airlines, with the air travel sector and, indeed, with Canadians who are concerned to try and figure out a way forward where we can ensure that Canadians are treated fairly and our industry remains there for when our economy picks up again,” Trudeau told reporters Thursday.

None of Canada’s major airlines are offering to return cash to passengers for the hundreds of thousands of flight cancellations since mid-March, opting instead to dole out 24-month vouchers that have left many customers frustrated over a service they paid for but have not received.

A trio of petitions touting more than 74,000 signatures call for full refunds before any financial aid is handed out to airlines.

The pleas may have fallen on deaf ears, with Trudeau announcing last week that the country’s largest employers — including Air Canada, WestJet Airlines Ltd. and Transat AT — will be eligible for federal support to help weather the COVID-19 economic crisis.

Loans start at $60 million for companies with at least $300 million in annual revenues under the Large Employer Emergency Financing Facility program. Ottawa can take an ownership stake in public companies — Air Canada is publicly traded — and bar executives from earning more than $1 million.

Advocates say that Canadians who have lost their jobs or closed their businesses need the refund money “desperately,” along with senior citizens and people with health problems — all of whom may never have an opportunity to redeem the two-year vouchers.

“By offering vouchers for future travel the airlines are not meeting the wishes of their passengers and are in fact knowingly creating a coronavirus profit centre by using the money they are holding as interest-free loans,” reads a petition launched by Toronto resident Bob Scott and presented before the House of Commons last week by Liberal MP Yasmin Ratansi.

“The proceeds from these unredeemed coupons will flow directly to the airlines’ bottom line,” states the petition, whose online version counts roughly 15,000 signatures.

Canada is an outlier among western countries on the issue of refunds, with the European Union and the United States requiring airlines to offer them.

Carriers are reeling from the virtual shutdown of commercial flight around the globe as borders remain closed and air travel demand hovers at record lows.

Air Canada has grounded about 225 planes and 95 per cent of its capacity after losing more than $1 billion last quarter. WestJet has cancelled all flights outside of the country until July 4 and Air Transat, Porter Airlines and Sunwing Airlines Ltd. have halted all trips until late June.

This report by The Canadian Press was first published May 21, 2020.

Companies in this story: (TSX:AC, TSX:TRZ)

Christopher Reynolds, The Canadian Press

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