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New federal support for the pandemic-affected Canadian airline industry will depend on carriers providing refunds to passengers whose flights have been canceled, the government announced on Sunday.
Transportation Minister Marc Garneau set the requirement when he announced Ottawa is ready to respond to the industry’s desperate demands for federal assistance by starting talks later this week.
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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.
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.
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“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 added. “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.
The harsh words about refunds were cautiously greeted on Sunday as a good first step by Canadian Automobile Association Vice President Ian Jack, whose organization is one of Canada’s largest vacation and leisure travel retailers.
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“It’s the starter gun, but it’s by no means a fait accompli,” Jack said. “We will follow these negotiations closely. Now there is a concrete and honest commitment from the government that we expect it to honor. “
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.
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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.
The National Airlines Council of Canada, which represents major airlines, was encouraged by the news that Ottawa is looking to work with carriers and help “stabilize” the industry.
“The pandemic has had a devastating impact on airlines, our employees, regional service and the communities we serve across the country. Airlines are struggling to remain viable due to the economic chaos created by COVID-19, “President and CEO Mike McNaney said in a statement.
“All steps have been taken to reduce costs and revenue has fallen beyond means for even the most extreme cost-cutting measures to be addressed. The industry will not recover without strong federal leadership. “
– With Global News files
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© 2020 The Canadian Press
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