Coronavirus: U.S. and EU give airline passengers refunds, but Canada sticks with vouchers

Click to play video 'Canadian air travellers angry at federal government for not ordering refunds' Canadian air travellers angry at federal government for not ordering refunds
Canadian air travellers are outraged that the federal government isn't following the lead of the U.S. government, and ordering airlines to give travellers refunds for flights cancelled due to COVID-19. Anne Drewa reports. – Apr 10, 2020

When the U.S. Department of Transportation recently issued an enforcement to airlines stating passengers impacted by COVID-19 are entitled to refunds for cancelled flights, Jami McMartin was hopeful Canada might do the same.

However, the Canadian Transportation Agency (CTA) is standing firm that airlines are not obliged to refund passengers for flights suspended by the pandemic.

“It’s ridiculous to be honest with you. If everyone else is doing it, then I feel they should be looking into it,” said McMartin.

READ MORE: Coronavirus: B.C. woman files class action against Canadian airlines over cancelled flights

The B.C. resident was scheduled to travel to Cuba via Sunwing Airlines on March 21, but was later forced to cancel her trip because of the coronavirus outbreak.

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McMartin said Sunwing initially offered her a refund, which was in the middle of being processed, but that at the end of March, the airline told her it was only offering vouchers.

“To be promised one thing and to have it processed and then have it stopped, it makes me not want to travel because there’s no protection for us at all,” said McMartin.

The European Union has made a similar move to the U.S., ordering airlines to reimburse customers for cancelled flights, but whether or not airlines follow through with that order will be another matter.

Click to play video 'Coronavirus: Travel companies not issuing refunds' Coronavirus: Travel companies not issuing refunds
Coronavirus: Travel companies not issuing refunds – Apr 10, 2020

John Gradek, a lecturer in aviation management at McGill University, said there’s a good chance airlines will take their time offering refunds.

“If you are Canadian and you’re on a flight that originated in Europe or the U.S. and the flight’s been cancelled, you can apply to get a refund,” he said.

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“The airlines will drag their feet to give a refund and they are hoping that the Americans and the EU will change their mind (and) basically go back to the way the Canadian government has taken it and say, ‘No cash, we’ll just offer a voucher.’

“So the odds of those regulations changing are very high.”

READ MORE: Coronavirus: Canadians out thousands trying to get refunds for weddings, vacations

Consumer Matters reached out to the Canadian Transportation Agency on whether it would consider cash refunds given the recent decision by the U.S., and received the following email response:

“In these extraordinary circumstances, it would not be unreasonable for airlines to provide vouchers or credits, even if this is not clearly required in certain situations, and for passengers to accept them,” the agency said.

The agency also indicated that these vouchers or credits should not expire in an unreasonably short period of time, such as 24 months.

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“This approach strikes a balance between passenger protection and airlines’ operational realities during this unprecedented situation,” the statement continues. “It could help ensure that passengers do not simply lose the full value of their flights and that, over the longer term, the air sector is able to continue providing diverse services.”

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Gradek said he’s not surprised: “There’s no revenue coming in. … They are looking to try and conserve as much cash as they possibly can.”

The CTA also told Consumer Matters that Canada’s legal framework, which differs from the U.S. and the EU, does not require an airline to refund passengers if a flight is cancelled due to situations outside of the airline’s control, including a global pandemic.

READ MORE: Coronavirus: Airlines obliged to offer credit, not refunds, watchdog says

Consumer Matters also reached out to Sunwing on McMartin’s behalf and received the following statement:

“While we initially offered customers booked on our flights a choice between a future travel credit valid for 12 months and a full cash refund, we quickly had to adjust due to the changing circumstances. Therefore, in line with all other Canadian airlines and tour operators, we have adjusted our policy so that all customers are treated consistently. All customers booked on our flights will be offered a future travel credit, and as a further gesture, we have extended the validity of this credit to two years.

“Once these government-imposed travel restrictions are lifted, we intend to provide customers with the vacations they had planned using the travel credits issued to them. This policy is in line with the guidelines published by the Canadian Transportation Agency and other jurisdictions, including British Columbia.”

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Passengers can still file a complaint with the Canadian Transportation Agency, but the CTA has stated on its website it has temporarily paused all dispute resolution activities involving carriers until June 30 to permit them to focus on immediate and urgent operational demands.

The agency said it will determine if whether or not to extend the pause by the end of June.

READ MORE: Coronavirus: Airline customers struggle to get refunds amid pandemic

Gabor Lukacs, founder of Air Passenger Rights and a frequent critic of the agency, is challenging the CTA in federal court over the statement, which he said is not legally binding.

“The government is misleading the public. The laws and the regulations with respect to airlines have not changed whatsoever,” Lukacs told Global News in an interview.

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“The federal regulator issued an unlawful statement with respect to vouchers which has no basis whatsoever in law. It is being used by airlines and the travel agency and the insurance industry to mislead passengers to believe they have to accept vouchers.”

— With files from Sean O’Shea