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Air Canada holding to refund pledge as aid negotiations drag on

Ottawa has put reimbursement of travellers on the table as a key demand in exchange for financial relief for airlines

March 5, 2021
by The Canadian Press (CPSTF)

Unifor president Jerry Dias says Air Canada continues to promise refunds for passengers whose flights were cancelled during the Covid-19 pandemic.

The airline has made the pledge repeatedly during negotiations with the federal government over an aid package for the battered sector, said Dias, who noted talks are ongoing.

“I spoke to the (former) CEO of Air Canada last night. So I know that this commitment has been made for quite a while,” he said, referring to Calin Rovinescu, who stepped down Feb. 15.

Air Canada said that discussions are ongoing, but no deal has been reached.

“The government is in discussions with air carriers on potential additional financial assistance,” said Jessica Eritou, a spokeswoman for Finance Minister Chrystia Freeland.

Bailout conditions

Rovinescu said in November that Air Canada would not hesitate to reimburse customers stuck with unused tickets if the conditions of a federal bailout were reasonable.

After a halting start nearly four months ago, talks ramped up over the past month, reaching a pace that he called a negotiation. Any deal would include a resolution on passenger refunds, a plan for returning service to regional markets and financial support for the aerospace sector, Rovinescu said last month.

Air Canada says there are no updates since then, with no agreement yet in place.

Dias said only about 4,000 of the union’s 15,000 aviation workers remain fully employed a year into the Covid-19 pandemic, lending urgency to discussions in Ottawa.

“We can’t get more urgent than now,” he said.

“Frankly, getting a little frustrated hearing that it’s imminent, just around the corner. Like, it’s been a year – I’ve grown two beards since hearing this.”

Ottawa has put reimbursement of travellers on the table as a key demand in exchange for financial relief for airlines, on top of asking carriers to maintain regional routes and protect jobs.

Thousands of would-be passengers remain in the lurch as Air Canada resists reimbursement of customers who paid for services that were never rendered following border closures and public health guidance advising against travel.

Air Canada reported in February it held onto $2.3 billion in advance ticket sales last quarter.

WestJet Airlines announced in November it would repay passengers whose flights it cancelled due to the pandemic.

$1.2 billion loss

Air Canada posted a staggering $1.2 billion loss in the fourth quarter of 2020, a result that caps what Rovinescu called the bleakest year in aviation history.

“While there is no assurance at this stage that we will arrive at a definitive agreement on sector support, I am more optimistic on this front for the first time,” Rovinescu said on a conference call with analysts Feb. 12, three days before he passed Air Canada’s controls to new CEO Michael Rousseau.

By late May, airlines around the world had received US$123 billion in aid – much of it loans – according to the International Air Transport Association.

Canada has doled out more than $1.7 billion to the aviation industry through the federal wage subsidy, but has steered clear of sector-specific support – the only G7 country to do so.

Unions calling for loans

Unifor and two pilot unions are calling for federal loans totalling at least $7 billion at one percent interest over 10 years. Unifor is also asking Ottawa to waive a fuel tax for Canadian carriers and freeze additional landing and gate fees on passenger and cargo flights.

Air Canada, Rouge, WestJet, Swoop and Sunwing agreed in January to suspend service to Mexico and the Caribbean at the request of Prime Minister Justin Trudeau to help fight viral spread.

The moves resulted in the temporary layoffs of thousands of airline workers.

Last month Air Canada announced it will temporarily lay off 1,500 unionized employees and an unspecified number of management staff as it cut 17 more routes to the U.S. and international destinations.

In December, the federal government directed the Canadian Transportation Agency, which oversees issues related to passenger rights, to strengthen rules that require airlines to refund travellers for cancelled flights.

However, the rules would only apply to future cancellations and will not be retroactive.


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