Ottawa says federal support to the airline industry depends on customer reimbursement

Canadian commercial airlines have been hit hard by COVID-19, with passenger levels dropped by as much as 90% thanks to a combination of travel restrictions and fear of contracting the disease.

This has prompted airlines to lay off hundreds of pilots and technicians and cut dozens of regional routes since March. They also canceled numerous pre-booked trips, offering passengers credits or vouchers instead of refunds.

Since then, many Canadians have expressed anger at not getting their money back. The Canadian Transportation Agency received 8,000 complaints between mid-March and late August, most of which are believed to be related to refunds.

WATCH | Thousands of Canadian travelers are still waiting for their flight refund:

CBC News has learned that despite receiving thousands of complaints from travelers seeking refunds for flights canceled due to COVID-19, the Canadian Transportation Agency hasn’t resolved any of them. 1:59

Passengers also filed a handful of class action lawsuits and three petitions that collected more than 100,000 signatures requesting customer reimbursement.

Garneau acknowledged the challenges the industry faces when he revealed the pending talks.

“The aviation industry cannot respond to these challenges alone, given the unprecedented impacts on its operations,” Garneau said in a statement.

“We are ready to establish a process with major airlines regarding financial assistance which could include loans and potentially other support to ensure important outcomes for Canadians,” he said. “We plan to start discussions with them this week.”

However, Garneau also made it clear what the government would ask airlines, starting with reimbursement of what is believed to be millions of dollars in prepaid airline tickets and a brake on canceled routes.

“Before we spend a dime of taxpayer money on airlines, we’ll make sure Canadians get their refunds,” he said. “We will ensure that Canadians and regional communities maintain air links with the rest of Canada.”

It wasn’t immediately clear whether this would include pushing Air Canada and others to resume dozens of routes that are currently suspended.

WATCH | Airline workers protest on Parliament Hill for help from the federal government:

Pilots, flight attendants and other aviation workers protest on Parliament Hill, frustrated that Transport Minister Marc Garneau has not come up with an aid plan for the industry, seven months after the pandemic began. 1:53

Unlike the Canadian authorities, the European Commission and the US Department of Transportation have required airlines to reimburse passengers for canceled flights.

The United States and European countries, including France and Germany, have also offered billions in financial aid to troubled carriers. Ottawa has not provided any industry-specific bailouts to the airlines.

The pandemic devastated the aviation industry, with billions of dollars in losses for Canadian carriers between ground flights and tight international borders.

Revenues of Canadian airlines in 2020 will decline by $ 14.6 billion or 43% from last year, according to May estimates by the International Air Transport Association.

‘In no way a fait accompli’

Harsh words about reimbursements were cautiously greeted on Sunday as a good first step, while others called for a federal action plan on internal testing and travel.

“It’s the starter gun, but it’s by no means an accomplished fact,” said Canadian Automobile Association Vice President Ian Jack, whose organization is one of Canada’s largest vacation and leisure travel retailers.

“We will be following these negotiations closely. Now there is a concrete and registered commitment from the government that we expect it to honor.”

Mike McNaney, president and CEO of the National Airlines Council of Canada, said in a statement Sunday that he was “encouraged by the government’s decision to work with carriers to try and stabilize the industry,” but stressed that further help is needed.

“In addition to financial support, a federal aviation testing strategy is critical to ensure the industry is able to safely reboot, address regional travel restrictions and international border measures,” McNaney said.

Alberta Premier Jason Kenney echoed the sentiment.

“While we welcome direct support to carriers, we also need to prioritize the development of a Canadian domestic travel framework and national rapid test plan,” Kenney said in a statement.