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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A medical worker prepares vials of the COVID-19 vaccines, Chinese Sinopharm, left, Sputnik V, center, and Pfizer at a vaccine centre, in the Usce shopping mall in Belgrade, Serbia, Thursday, May 6, 2021. Serbian authorities are looking for incentives for people to boost vaccination that has slowed down in recent weeks amid widespread anti-vaccination and conspiracy theories in the Balkan nation. The government has also promised a payment of around 25 euros to everyone who gets vaccinated by the end of May. (AP Photo/Darko Vojinovic)
38 new COVID-19 cases, more than 335k vaccines administered in Interior Health

Interior Health also to start targeted vaccinations in high transmission neighbourhoods

FILE PHOTO
Second doses of COVID-19 vaccine will be available, as AstraZeneca supply runs low: Interior Health

Province expecting large volumes of Pfizer BioNTech as age-based cohort immunization program ramps up

Greg Nesteroff and Eric Brighton, the historians behind popular Facebook page Lost Kootenays, are set to release a book of the same name and have just unveiled its cover showing the ghostly Hotel in Slocan City shortly before its 1953 demolition. Photo courtesy of Greg Nesteroff and Eric Brighton.
Popular historical Facebook page Lost Kootenays set to release book

128-page hard copy documenting history of East and West Kootenays coming this fall

Revelstoke’s Mayor Gary Sulz getting his COVID-19 vaccination on April 5. (Jocelyn Doll - Revelstoke Review)
Revelstoke is leading B.C.’s interior on vaccinations: Interior Health

Approximately 70% of the community has first dose of a COVID-19 vaccine

Revelstoke Fire Rescue Services responded to a fire at the Revelstoke Community Energy Corporation site Feb. 11, 2021. It was the fourth fire at the facility since it was built in 2005. (Revelstoke Fire Rescue Services photo)
Future uncertain for City of Revelstoke owned company

RCEC is using a backup system to provide heating after a fire forced the facility offline

(The Canadian Press)
Trudeau won’t say whether Canada supports patent waiver for COVID-19 vaccines

‘Canada is at the table to help find a solution’

City of Vernon Coun. Dalvir Nahal proposed two blocks of Main Street be closed to bolster recovery for downtown businesses amid the COVID-19 pandemic. (Caitlin Clow - Vernon Morning Star)
Vernon’s ‘support local’ Main Street closure would cost city $24K, staff say

Bylaw costs, loss of parking revenue and equipment logistics behind price tag

Five properties have been added to the Lake Country fire protection zone, after council moved to expand the local service area Tuesday, May 4, 2021. (Google Maps)
Lake Country expands fire protection zone, covering 5 exposed properties

The properties petitioned to join the local service area after being left out ‘for reasons unknown’

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

VSAR’s Air Rescue One unit assisted in a rescue in West Kelowna May 3, 2021. (VSAR screenshot)
VIDEO: VSAR’s Air Rescue One team assists in West Kelowna Rescue

The Vernon Search and Rescue helicopter team pulled off a successful rescue Monday

Peachland resident and cleanup volunteer Lloyd Stinson Sotas holds up a discarded TV riddled with bullet holes. (Aaron Hemens/Capital News)
PHOTOS: Peachland residents clean up community watershed

More than 70 people gave back to Mother Earth by assisting with the cleanup

Officials are surveying the streets of Vernon to get a better sense of the issue of homelessness in the city, as part of the province’s point-in-time homeless count for 2021. (Brendan Shykora - Morning Star)
Province conducts homeless count in Vernon

It’s the first time Vernon has been included in the provincial homeless count

A map showing where the most number of cases were recorded from April 23 to 29. This map, revealing a breakdown of infections by neighborhood, was pulled from a data package leaked to the Vancouver Sun last week (and independently verified).
36 Abbotsford schools flagged for COVID-19 exposures in the last 2 weeks, shattering record

Clearbrook Elementary recorded an ‘exposure’ on all 11 school days

Most Read