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Canadian Government Promises Airline Bailout But Receives Cool Reception After Demanding Passenger Refunds

Canadian Government Promises Airline Bailout But Receives Cool Reception After Demanding Passenger Refunds

Nine months after the COVID-19 pandemic grounded flights around the world and left airlines on their knees, the Canadian government now says it is finally considering an airline industry-specific bailout. But financial support from Canadian taxpayers will come with one big catch… airlines must first refund passengers for any flights that have been cancelled or altered as a result of the pandemic.

Minister of Transport Marc Garneau acknowledged on Sunday that the aviation industry had been harder hit by the Corona crisis than any other sector, would face a “delayed and slow recovery” and that airlines couldn’t respond to the challenges on their own, “given the unprecedented impacts on its operations”.

Promising to help some 100,000 Canadians directly employed within the airline industry, Garneau admitted that the Emergency Wage Subsidy scheme didn’t go far enough in helping the industry weather the storm.

“With passenger levels still down almost 90 per cent, air carriers and airports have been forced to take drastic measures to remain viable,” Garneau said. “A strong and competitive air transport industry is vital for Canada’s economy and the well-being of Canadians. Due to our vast geography, Canadians rely more heavily on air travel than other countries,” he continued.

But while Garneau hopes a bailout will save jobs and restore air service to regional communities that have been slashed in response to the pandemic, any bailout will come with a big condition attached.

“We have heard from many Canadians who have been negatively affected. When this unprecedented pandemic broke out in the spring, Canadians who had already booked travel ended up stuck with vouchers for trips they could not take instead of getting refunds.  They found themselves in a situation where they have given thousands of dollars in interest-free loans to airlines,” Garneau explained.

“Before we spend one penny of taxpayer money on airlines, we will ensure Canadians get their refunds… Any assistance the Government of Canada provides will come with strict conditions to protect Canadians and the public interest.”

Discussions with Canadian airlines over what support might be available will hopefully start at some point this week Garneau promised.

Westjet, however, responded cautiously to the minister’s announcement saying the airline would “await greater clarity on what support for the aviation sector might include.” In the meantime, the airline said it wouldn’t comment further.

Unlike some countries, the Canadian authorities haven’t imposed rules on airlines to refund passengers for cancelled flights but anger is growing amongst customers who are fighting to get their money back.

Between mid-March and August, the Canadian Transportation Agency received over 8,000 complaints, the vast majority of which are believed to be over airline refund policies. An online petition, meanwhile, has received over 100,000 signatories demanding Canadian airlines refund passengers.

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