Canada’s airlines gave credits – rather than cash back – to customers whose uninsured tickets were cancelled in the pandemic.Fred Lum/The Globe and Mail
More than a year into the pandemic, some Canadian airline customers are still awaiting refunds on cancelled flights.
Unlike their global rivals, Canada’s airlines gave credits – rather than cash back – to customers whose uninsured tickets were cancelled in the pandemic. The airlines pointed to a statement from the Canadian Transportation Agency that said credits were an acceptable remedy given the financial hardships the airlines faced in the pandemic.
Financial aid from taxpayers unveiled by the government in April allowed Air Canada and Transat AT Inc. to give refunds for flights and tickets cancelled beginning in mid-March, 2020, when countries closed borders, told people not to travel to limit the spread of COVID-19 and imposed quarantines on people returning from abroad.
Canada’s airlines halted flights, cancelling billions of dollars worth of airfares.
But Porter Airlines and Sunwing Airlines have still not offered refunds for most cancelled flights, and WestJet Airlines has restricted its refunds to tickets the airline cancelled – not the customer.
The three airlines and government say bailout talks are taking place, but will not say when agreements will be reached, nor when customers will get their money back.
WestJet has said it would not take a government loan, but might agree to a government-backed line of credit that would pay for refunds, according to a person familiar with the matter whom The Globe and Mail is not naming because they are not authorized to speak publicly on the matter.
Margaret Jones of River John, N.S., is waiting for a refund worth $4,630 for a Sunwing Vacations trip she had planned to take with her husband in March, 2020. The trip included a Sunwing flight from Halifax to Montego Bay, Jamaica, and several days aboard a cruise ship.
She has a credit for the amount of the trip, but prefers to get her money back as she has no plans to travel. “My husband’s not in the greatest of health,” Ms. Jones said in a phone interview. “He’s 84 and I’m 78 – we definitely don’t want to go on a cruise in the future, and if we take a vacation we don’t want to go to a resort that is full of people from all over the world and you don’t know whether they have had vaccinations.”
Sunwing received a government loan worth as much as $375-million in February through a pandemic program called the Large Employer Emergency Financing Facility (LEEFF) – the same program Air Canada and Transat tapped to provide refunds to their customers.
But rather than offer refunds, the government allowed Sunwing to hold money in an account from customers whose flights were cancelled “until a policy is established for the treatment of these prepaid amounts,” the government said in February.
“Sunwing supposedly has all this money in an account somewhere – gaining interest, no doubt – and supposedly will be returning it at some point, but what we all need to know is: When?” Ms. Jones said. “We’re fed up with waiting.”
Sunwing spokesperson Melanie Filipp said talks with the government are continuing. “We look forward to continuing discussions on the issue of refunds for customers with non-refundable bookings who have received a future travel credit amid the pandemic,” she said.
Katherine Cuplinskas, a spokesperson for Finance Minister Chrystia Freeland, declined to comment on talks with Sunwing, Porter and WestJet, or when aid packages could be announced. Ms. Kuplinskas reiterated the government’s statement that any aid for airlines will come with conditions that include refunds for customers.
Brad Cicero, a spokesman for Porter Airlines, said the Toronto-based airline is in talks for a LEEFF loan, but added that details are confidential and a resolution date in unknown.
WestJet has yet to provide refunds for people who cancelled their own ticket, but in October became the first Canadian airline to offer refunds for uninsured seats on flights the carrier cancelled.
“WestJet took this step without having received government support, unlike many of our global competitors,” WestJet spokesperson Morgan Bell said.
Taxpayers gave Air Canada a loan worth as much as $1.4-billion to provide customer refunds, part of a $5.9-billion government bailout the airline received. The airline said on June 10 that 40 per cent of 1.8 million eligible customers had applied for a refund.
Transat received a government bailout worth $700-million, $310-million of which is to pay for refunds. Annick Guérard, Transat’s chief executive officer, said on June 10 that customers have applied for 64 per cent of the total amount.
Transat’s decision to withhold refunds and offer credits until the government provided a loan was necessary for the health of the airline, which has not flown since January, “but not one that we have made with a light heart,” Ms. Guérard said.
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