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

Pictured here are Stettler-based band The Jazz Guys, who are launching this season’s Entertainment in the Park series at West Stettler Park on June 24th. photo submitted
Stettler’s The Jazz Guys to launch ‘Entertainment in the Park’ season June 23rd

This year’s festivities will consist of the following 10 free concerts

Alberta is now below 3,000 active cases of COVID-19, as the province reported 2,639 Wednesday. (NIAID-RML via AP)
Red Deer below 100 active COVID-19 cases for first time since March

69.7 per cent of Albertans 12 and over have at least one dose of the COVID-19 vaccine

Premier Jason Kenney says the provincial government is doing everything it can to encourage Albertans to get vaccinated. (Photo by Chris Schwarz/Government of Alberta)
Travel prizes added to Alberta’s vaccine lottery

More than 40 travel rewards available for those who are fully vaccinated

Stettler town hall
Town approves Canada Day fireworks show, using phase two health restrictions

The funding for the fireworks show has already been allocated

Castor Evangelical Missionary Church Pastor Brent Siemens, celebrating five years in Castor, reflects on the journey that brought him to the community. Kevin J. Sabo photo
Castor pastor celebrates five years of serving the community

Brent Siemens is the pastor of Castor’s Evangelical Missionary Church

People line up to get their COVID-19 vaccine at a vaccination centre, Thursday, June 10, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Vaccines, low COVID case counts increase Father’s Day hope, but risk is still there

Expert says people will have to do their own risk calculus before popping in on Papa

A vial containing the Moderna COVID-19 vaccine is shown at a vaccination site in Marcq en Baroeul, outside Lille, northern France, Saturday, March 20, 2021. THE CANADIAN PRESS/AP/Michel Spingler
mRNA vaccines ‘preferred’ for all Canadians, including as 2nd dose after AstraZeneca: NACI

New recommendations prioritizes Pfizer, Moderna in almost all cases

House Majority Whip James Clyburn, D-S.C., center left, reaches over to Rep. Maxine Waters, D-Calif., joined by Speaker of the House Nancy Pelosi, D-Calif., center, and members of the Congressional Black Caucus as they celebrate the Juneteenth National Independence Day Act that creates a new federal holiday to commemorate June 19, 1865, when Union soldiers brought the news of freedom to enslaved Black people after the Civil War, at the Capitol in Washington, Thursday, June 17, 2021. It’s the first new federal holiday since Martin Luther King Jr. Day was created in 1983. (AP Photo/J. Scott Applewhite)
Biden to sign bill making Juneteenth a federal holiday

New American stat marks the nation’s end of slavery

A screenshot of the First Peoples Cultural Councils First Peoples’ Map. (First Peoples Cultural Council)
Online resource blends B.C.-Alberta’s Indigenous languages, art and culture

Advisor says initiative supports the urgent need to preserve Indigenous languages

A plane is silhouetted as it takes off from Vancouver International Airport in Richmond, B.C., May 13, 2019. THE CANADIAN PRESS/Jonathan Hayward
Report calls for airlines to refund passengers for flights halted due to COVID-19

Conclusion: federal help should be on the condition airlines immediately refund Canadian travellers

Green party Leader Annamie Paul speaks during a news conference on Parliament Hill in Ottawa on Tuesday, June 15, 2021. Paul has survived another day of party strife after a planned ouster shifted course, leaving her with a tenuous grip on power ahead of a likely federal election this year. THE CANADIAN PRESS/Justin Tang
Green Leader Annamie Paul blasts ‘racist,’ ‘sexist’ party execs who sought ouster

Fallout has continued, with two of the federal council’s members resigning

Russian President Vladimir Putin, left, and U.S President Joe Biden shake hands during their meeting at the ‘Villa la Grange’ in Geneva, Switzerland in Geneva, Switzerland, Wednesday, June 16, 2021. (AP Photo/Alexander Zemlianichenko, Pool)
Biden says meeting with Putin not a ‘kumbaya moment’

But U.S. president asserted Russian leader is interested in improved relations, averting a Cold War

A nurse prepares a shot of the COVID-19 vaccine at the Yukon Convention Centre in Whitehorse on Wednesday, March 3, 2021. THE CANADIAN PRESS/Mike Thomas
Vancouver couple pleads guilty to breaking Yukon COVID rules, travelling for vaccine

Chief Judge Michael Cozens agreed with a joint sentencing submission,

Most Read