Air Canada and Other Canadian Airlines May Have to Refund Passengers to Receive Government Aid, per a statement by Transport Minister Marc Garneau.
Air Canada, West Jet, and other Canadian airlines have been among the worst when it comes to refunding passengers for flights cancelled by the airline, during the COVID-19 pandemic. While U.S. airlines initially also dragged their feet on refunds for flights the airlines cancelled, in May 2020 the DoT insisted that airlines refund passengers within 7 days, in accordance with the refund policy in place at the time the passenger made the booking. The DoT also made clear that when it was the airline that cancelled or significantly changed the booked flight, the traveler could decline a travel voucher and insist on a refund back to the payment card.
Unfortunately for passengers, Air Canada has decided to ignore the U.S. DoT when it comes to refunds on Air Canada flights to the U.S. The Canadian Transportation Agency (CTA) stated that it was acceptable for Canadian airlines to force passengers to accept travel vouchers (instead of a cash refund), if the vouchers were valid for 24 months or more. See Do DoT Rules Apply to Foreign Airlines? Air Canada Challenges DoT on Refunds.
We always recommend that clients who are due refunds first work in good faith with the travel provider to receive a refund, but if that leads nowhere, such as in the case of Air Canada, it makes sense to then initiate a credit card chargeback.
The good news is that Canada's Ministry of Transport has issued a statement in support of passengers and their refunds, bolding ours:
“…Canadians who had already booked travel ended up stuck with vouchers for trips they could not take instead of getting refunds. They…have given thousands of dollars in interest-free loans to airlines…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.”
Let's hope that beyond ensuring refunds prior to providing aid, Canada gets some legislation and/or a CTA that will protect passenger rights, not just airlines' finances.
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