The Canadian Government has floated a potential financial aid for airlines but that would come with strings attached such as that the airlines would refund customers their money for cancelled flights.
Canada has so far given the airlines tremendous freedoms to avoid them having to refund passengers which lead to an outcry from consumer advocates but as the Covid crisis enters a prolonged phase and carriers might need rescue packages this might finally change.
Airlines such as Air Canada and Westjet would only get government aid (taxpayer dollars) if they finally give the very same taxpayers their money back, a system which has already been used in Germany where Lufthansa’s rescue package was tied to similar conditions.
As the CBC reported last night the government requires airlines to refund passengers before any rescue payments or loans will be given/guaranteed.
New federal support for Canada’s pandemic-battered airline industry will be contingent on carriers providing refunds to passengers whose flights were cancelled, the government announced on Sunday.
Transport Minister Marc Garneau laid out the requirement as he announced that Ottawa is ready to respond to the sector’s desperate pleas for federal assistance by launching talks later this week.
Canada’s commercial airlines have been hit hard by COVID-19, with passenger levels down as much as 90 per cent thanks to a combination of travel restrictions and fear of catching the illness.
That has prompted airlines to furlough hundreds of pilots and technicians and discontinue dozens of regional routes since March. They have also cancelled numerous pre-booked trips, offering passengers credits or vouchers instead of refunds.
Many Canadians have since expressed anger over not getting their money back. The Canadian Transportation Agency received 8,000 complaints between mid-March and the end of August, most of which are believed to be related to refunds.
Passengers have also filed a handful of proposed class-action lawsuits and three petitions garnering more than 100,000 signatures that call for customer reimbursement. …
Garneau also made clear what the government would be demanding from airlines, starting with refunds of what is believed to be millions of dollars in prepaid flight tickets and a curb on cancelled routes.
“Before we spend one penny of taxpayer money on airlines, we will ensure Canadians get their refunds,” he said. “We will ensure Canadians and regional communities retain air connections to the rest of Canada.”
Let’s keep in mind that this refund crisis is largely home made and that the Canadian Transportation Agency has pretty much sanctioned the practice of Canadian airlines being allowed to issue vouchers instead of cash back in late March.
To now point the finger away from themselves I feel the government tries to make it a bit too easy for themselves.
As the article mentions there are already many lawsuits pending and a good number of passengers were able to recover their funds through a credit card chargeback process.
The Canadian Government won’t spend any taxpayer money on an airline bailout unless they have first refunded Canadians for cancelled flights which quite frankly they should have done months ago. People would go crazy if the politicians gave the airlines billions while they’re still waiting for refunds on tickets and try to make ends meet.
Consumer protection in Canada is largely on paper only and the government enforcement agencies are way too cozy with the industries they’re tasked to regulate. More often than not consumers in Canada have to go to court before seeing any meaningful resolution in legitimate complaint situations, be it a defective product or a refund matter.