How long until Trudeau gives the airlines a bailout?


Between the various hats that I wear as a journalist, a sometimes public speaker and a consultant, I find myself in the skies more often than most.  Not quite at Ryan Bingham levels, for those who’ve seen or read Up in the Air, but still, enough that I’m responsible for a not insignificant amount of airline revenue.

This year has been a bit different, of course.  I took 104 flights last year, compared to just 23 this year.  Of those, only a handful have been since the world locked down in March.  At the time, I had quite a number of flights booked, some of which I had to cancel myself, while most were canceled by Air Canada.  With one exception, all of these flights were domestic, meaning there has never been a government travel restriction that would affect them.  However, anytime I’ve gotten an email informing me of a cancellation, it has conspicuously blamed a “government travel advisory.”

No such advisory exists, but Air Canada believes classifying cancellations in this way, exonerate it from any moral or financial responsibility.  This effectively lets the company skirt the relatively new Air Passenger Protection Regulations that require airlines to compensate passengers for delays and disruptions stemming from “situations within airline control.”

The airlines claim that they are, pardon the pun, mere passengers to COVID-19 and that these cancellations aren’t within their control.  If an airline cancels a flight due to poor demand stemming from the pandemic, is that a choice by the airline?  I’d say it is, though it’s murky, and shows how the passenger protection regulations still leave considerable grey area.

Thus, Air Canada is offering no compensation, nor even refunds.  Instead, passengers have been receiving non-refundable vouchers to be used on future flights.  This may have been forgivable when we still thought we were just in this for “two weeks to flatten the curve,” but even now, future travel is hard to envision.  United Airlines’ CEO says he doesn’t expect normal flying demand to return until 2024, so there’s that.

Until last week, WestJet was no different, though the Calgary-based airline just announced it will be contacting all customers whose itineraries were cancelled by the airline, going back to March, to offer refunds.

Air Canada took to Twitter to accuse WestJet of “just now catching up to our policy to refund refundable fares,” though WestJet’s Twitter account was quick to point out that, unlike Air Canada, WestJet is refunding all relevant fares – even lower cost nonrefundable fares.

Air Canada went conspicuously quiet after that.

There’s no denying airlines are hurting financially.  Even if they make for apt corporate villains, they employ tens of thousands of people normally, and can no longer do that if people aren’t flying.  Air Canada’s stock price went from just over $50 in January to under $17 when markets closed last week.  Both Air Canada and WestJet have laid off thousands this year.

While no bailout has been proposed, the federal government hasn’t ruled it out.  Before a dime of taxpayer money goes to airlines, “it absolutely must be tied to refunds for passengers,” Conservative transport critic Stephanie Kusie said.  Her NDP counterpart Niki Ashton went further to say customers have been “ripped off” by receiving vouchers instead of refunds.

It’s possible what looked like a benevolent act from WestJet was a strategic play to go hat-in-hand to the federal government, but that doesn’t make it any less right for the company to have done so.

As it stands, there is a proposed class action lawsuit against Canadian airlines over the very question of whether they must provide refunds over COVID-19 cancellations.

I am sympathetic to the airlines in some regard, given their cash crunch is undeniable.  But the unforeseeable nature of COVID-19 gives no excuse to companies to make their woes those of their customers.

My wish has been that airlines would offer their customers a choice: a refund of 100% of what was paid for the ticket, or a credit worth 125%.  Some cruise lines have done this with some success, striking a balance between keeping the revenue in hand while sweetening the deal for customers.  It buys a lot of goodwill, and for someone like me who hopes to be traveling again, would offer a bit of hope.

Photo Credit: Yahoo

More from Andrew Lawton.     @andrewlawton

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