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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Surrey Board of Trade is calling on the provincial government to implement a temporary paid sick-leave program. (Unsplash.com photo by Kelly Sikkema)
Surrey Board of Trade calls for temporary paid sick-leave program

Reccomendations sent to provincial labour minister, news release notes

North Surrey Sport and Ice Complex. (Photo: larkgroup.com)
North Surrey Sport & Ice Complex earns B.C. facility excellence award

Award is among four presented by BC Recreation and Parks Association

Surrey Memorial Hospital emergency department entrance. (Photo: Lauren Collins)
Youth counselling services expand to Surrey Memorial and other hospitals with $1.35M grant

Dan’s Legacy Foundation to provide free mental health, substance-use outreach

Low tide offered plenty of space for people to relax on White Rock's beach Sunday afternoon. (Aaron Hinks photo)
City of White Rock asking outside visitors to stay away

South Surrey residents encouraged to visit, while others urged to stick close to home

Jose Marchand prepares Pfizer COVID-19 vaccination doses at a mobile clinic for members of First Nations and their partners, in Montreal, Friday, April 30, 2021. The National Advisory Committee on Immunization is coming under fire after contradicting the advice Canadians have been receiving for weeks to take the first vaccine against COVID-19 that they’re offered. THE CANADIAN PRESS/Ryan Remiorz
Trudeau says he is glad he got AstraZeneca, vaccines are only way out of pandemic

‘The most important thing is to get vaccinated with the first vaccine offered to you’

A wild rabbit grazes in Nanaimo, B.C. in this Feb.2, 2018 photo. Rabbit owners in Alberta are being warned about a deadly virus that was identified in a southern Alberta household last month. THE CANADIAN PRESS/Dirk Meissner
‘Like a flash fire:’ Rabbit owners warned about outbreak of deadly disease in Alberta

The disease is confined to rabbits and cannot spread to humans

A lady wears a vaccinated sticker after receiving a COVID-19 vaccine at a vaccination clinic run by Vancouver Coastal Health, in Richmond, B.C., Saturday, April 10, 2021. THE CANADIAN PRESS/Jonathan Hayward
Canada may find it challenging to reach herd immunity from COVID-19, experts say

Level of immunity among the population changes with the variants, especially the more transmissible strains

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

B.C.’s provincial health officer, Dr. Bonnie Henry. THE CANADIAN PRESS/Jonathan Hayward
Dip in COVID-19 cases with 572 newly announced in B.C.

No new deaths have been reported but hospitalized patients are up to 481, with 161 being treated in intensive care

Ripy Jubbal of Abbotsford has received a 30-month jail sentence for the fraudulent use of credit cards and credit card data. (Facebook photo)
Abbotsford woman sentenced for $80K in fraudulent credit card purchases

Ripy Jubbal and spouse used identities of 19 different victims, court hears

Solar panels on a parking garage at the University of B.C. will be used to separate water into oxygen and hydrogen, the latter captured to supply a vehicle filling station. (UBC video)
UBC parkade project to use solar energy for hydrogen vehicles

Demonstration project gets $5.6M in low-carbon fuel credits

FILE – A student arrives at school as teachers dressed in red participate in a solidarity march to raise awareness about cases of COVID-19 at Ecole Woodward Hill Elementary School, in Surrey, B.C., on Tuesday, February 23, 2021. THE CANADIAN PRESS/Darryl Dyck
B.C. ‘should be able to’ offer 1st dose of COVID vaccine to kids 12+ by end of June: Henry

Health Canada authorized the vaccine for younger teens this morning

Most Read