Air Canada Agrees to Refund in Exchange for Bailout

Air Canada reportedly agreed with the Canadian government to refund its customers for flights that have been either postponed or canceled because of the COVID19 pandemic. In an interview with Unifor president Jerry Dias, he spoke about the negotiation between Ottawa and Air Canada. He said that “the precondition for receiving a federal package is that Air Canada and other airlines will have to repay customers”.

Negotiation Process

Canada is the last G7 nation to offer a bailout to its airline industry. However, the road to a payroll assistance deal similar to that in the US and other parts of the world isn’t simple. One of the biggest roadblocks is the reluctance of airlines to refund their passengers for canceled flights due to the COVID19 pandemic.

The airline company initially was reluctant to offer a refund unless it was mandated by law. WestJet, on the other hand, provided ticket refunds but also offered an alternative discounted ticket with vouchers for their passengers.

Air Canada Agrees to Refund

The negotiations weren’t exactly easy. It took four months before Air Canada agreed to refund their customers. But with the way things are going industry leaders and politicians are optimistic that a deal is on the horizon. Dias said that “I know that they’re very close”.  According to Dias, we can all expect an announcement soon.

The refund is just one of several demands coming from the Canadian government. Other demands to make the bailout possible include restoration of vital flight routes and financial transparency.

Both the company and Ottawa refused to comment on the refunds. Air Canada spokesperson Peter Fitzpatrick said that the company was “encouraged with the constructive nature of discussions”.

During the pandemic, the airline downsized its operations cutting staff and services. In June 2020, the company reduced its workforce by 50% to 60%. They let go a total of 22,800 people. And in January, Air Canada announced to cut another 1,700 jobs plus lessening their regional routes to and from remote areas in Canada.