Ottawa to develop refund regulations for flight cancellations

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Ottawa looks to develop new refund regulations that strike a compromise between passengers and airlines.

Ottawa is developing new refund regulations to protect customers without imposing burdens on airlines. This measure comes following the widespread cancellation of flights from and to the U.K. Earlier in the week, the U.K. health officials announced the identification of a new strain of coronavirus in England. Many European countries and also Canada opted for restricting travel to and from the U.K. as a consequence of this.

Transport Minister Marc Garneau stated: “The ongoing COVID-19 pandemic has highlighted a gap in the air passenger protection framework. We did not foresee the potential for large-scale and lengthy flight cancellations and groundings of air carrier fleets not only in Canada but globally”. He also added that ‘in the event’ of future situations with similar cancellations, the new measure will ensure fairness of treatment for travelers.

Moreover, Garneau reiterated the government’s support for both citizens and businesses. He stressed that the updated regulation must not ‘impose an undue financial burden’ on airlines. Therefore, simultaneously, Ottawa is developing a comprehensive package of financial assistance for Canadian airlines, airports, and the aerospace sector.

What has the government done until now?

So far, the government has invested over $1.4 billion in helping Canadian airlines pay up to 75 percent of employee wages during the pandemic. Still, some companies such as Air Canada remain worried. Air Canada, for example, reported total revenues of $757 million in the third quarter of 2020. This is an 86 percent drop from revenues in the third quarter of 2019, which amounted to $4.7 billion. The company was forced to take the ‘painful step’ of cutting half of their workforce in June, up to 20’000 jobs.

Nonetheless, the new measures are a clear step that the government is aligning itself with customers in the dispute. Months prior, Garneau had stated that forcing airlines to refund passengers would cause them to fail. Ottawa feared the ‘devasting effect’ on the aerospace and tourism sector this could bring. But as thousands and thousands of customers reported unfair treatment and behavior from airline companies, the federal government noticed. And on November 8, Garneau retracted his previous rhetoric. This time, he stated that no industry-specific support package by the government would see the light of day. Not before airlines gave a clear commitment to refunding passengers.