Canada plans aviation bailout, so long as passengers get refunds

Canada is on the cusp of pushing serious funds into its aviation industry, a move necessary to keep the planes moving as COVID-19 continues to suppress demand in the country. But Minister of Transport Marc Garneau added a caveat to the plan, one that could make passengers even happier than the airlines: Refunds must be issued for canceled flights.

Read More: Jilted travelers get aggressive in seeking airline refund enforcement from the DOT

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In a statement issued on Sunday Garneau called attention to the plight of the carriers, but also reversed course from May 2020 where he suggested “If airlines had to immediately reimburse all cancelled tickets, it would have a devastating effect on the air sector, which has been reeling since the COVID 19 pandemic started.” Now he acknowledges that “Canadians are rightly angered” by the vouchers and other developments of recent months.

And so, as the government prepares to develop a bail-out plan, it is also focused on consumers. Or at least it claims to be:

The air sector cannot respond to these challenges on its own, given the unprecedented impacts on its operations. To protect Canadians, the Government of Canada is developing a package of assistance to Canadian airlines, airports and the aerospace sector. As part of this package, we are ready to establish a process with major airlines regarding financial assistance which could include loans and potentially other support to secure important results for Canadians. We anticipate beginning discussions with them this week.

Before we spend one penny of taxpayer money on airlines, we will ensure Canadians get their refunds. Regional connectivity is important to Canadians travelling now and in the future. We will ensure Canadians and regional communities retain air connections to the rest of Canada, and that Canadian air carriers maintain their status as key customers of Canada’s aerospace industry. Any assistance the Government of Canada provides will come with strict conditions to protect Canadians and the public interest.

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Read More: Air Canada fights back on refund demands, disputes DOT authority

Of course, how this plays out remains to be seen. WestJet issued a statement indicating it “will evaluate this afternoon’s statement from the Government of Canada and will await greater clarity on what support for the aviation sector might include.” But the carrier is not making any further plans at this time. In late October the Calgary-based carrier promised to reverse course on its vouchers policy, starting to issue refunds as of last week.

With Canadian authorities failing to act until now many passengers with flights that touched the US pursued the issue through the Department of Transportation. That agency also has held off on enforcement action as the airlines dispute its authority on such matters.