“In some cases, their future is in jeopardy,” Marc Garneau says of airlines

Beset by thousands of Canadians demanding their money back for flights they could not take, Canada’s Minister of Transport appeared Friday to rule out forcing airlines to reimburse travellers for cancelled flights during the COVID-19 pandemic.

“If airlines had to reimburse all the tickets that have been cancelled, that would have a devastating effect,” said Marc Garneau at a news conference Friday morning. He noted airlines have lost 90% of their revenue as passengers heeded government advice to stay home.

“There’s no question, the airline industry, and I include the airport and NAV Can, which is our air traffic controller, have been disproportionately hit by this pandemic,” said Garneau. “In some cases their future is in jeopardy.”

Data from three Canadian airports that have published their April passenger figures show the drop off in vivid detail.

Calgary, Victoria, and Ottawa all saw declines in the range of 95% or more. Ottawa’s traffic dropped a staggering 98% from February to April. In the most recent month, just 6,654 passengers passed through the terminal, including not just 309 international passengers, all from the United States, as the country closed its borders to most foreign visitors.

“We were doing quite well until mid-March and then boom! The bottom just fell out,” said Geoff Dickson, President and Chief Executive Officer of Victoria International Airport.

“We were doing quite well until mid-March and then boom! The bottom just fell out.”

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“Airports, airlines and the aviation industry will be forever changed by the pandemic, and we will need financial help from the government to sustain our operations and to help lead in the recovery,” said Rob Palmer, Vice President and Chief Financial Officer of the Calgary Airport Authority in a release this week. “While our hope is that we are not forced to increase fees to airlines or guests, without government financial assistance we have few other options.”

The minister’s comments are one more indication the government will not force airlines to reimburse travellers for flights cancelled during the pandemic.

That leaves the courts as the only real alternative. Airlines are already facing at least two class-action lawsuits from people demanding their money back rather than getting vouchers for travel they may no longer want to take.

At the same time, when challenged on the question, Garneau declined to shut the door completely on refunds. He said he’s watching the situation day-by-day.

“The airline industry is starting to fly again. It’s going slowly, but it’s a beginning,” he said. “We’ll see in the coming days if the situation will start to stabilize and, we hope, even get better.”

“Our load factor for a departure out of Toronto, hubbing through Calgary to Vancouver [Friday] is 70%, that’s 7-0 per cent,” said Flair Vice President of Customer Experience John Mullins in an interview with Western Aviation News. That means more than 130 seats occupied out of 189 available.

Flair is a small ultra low-cost carrier reduced to two routes during the pandemic operating four days a week between Toronto and Vancouver, one passing through Edmonton and the other through Calgary.

“People are starting to open up,” he said. “We’re starting to see an uptick where you can’t assume the plane’s going to be 70% empty.”

Garneau said he’s not willing to commit to actions that would jeopardize the industry’s future, such as requiring airlines to offer refunds.

“This is the second largest country on Earth, with vast distances and remote areas, and we expect and need an airline industry in this country,” he said. “Trying to maintain that fine balance is what’s important here.”

“I want to make sure that as this pandemic recedes we still have an airline industry in our country,” he said.