Balancing factors will keep airfares stable post-pandemic, says IATA’s de Juniac

“We will ensure Canadians get their refunds”: Airline bailout in the works

OTTAWA — After months of speculation, the Canadian government has finally announced “a package of assistance” for Canadian airlines, airports and the aerospace sector.

Minister of Transport, the Honourable Marc Garneau, announced the news today, saying that “loans and potentially other support” may be included in the package.

Discussions between the government and the air sector are set to take place this week.

The issue of refunds and commission recalls has galvanized the retail travel sector after months of extreme challenges and hardship. Agents have been vocal about their frustration with the situation.

In an official statement, Garneau emphasized the importance of Canada’s air industry and the need for Canadians to support it. Here is his statement in full:

“A strong and competitive air transport industry is vital for Canada’s economy and the well-being of Canadians,” he said. “Due to our vast geography, Canadians rely more heavily on air travel than other countries. Canada has successfully built a strong air travel system that connects communities across regions, supports a green, world-leading aerospace supply chain, the tourism sector and regional economic development, and directly employs over 100,000 Canadians.

“The pandemic has hit the air sector harder than any other and it is facing a delayed and slow recovery.  With passenger levels still down almost 90 per cent, air carriers and airports have been forced to take drastic measures to remain viable.  Broad-based government supports like the Canada Emergency Wage Subsidy have helped to mitigate the severe impact on employees in the sector.

“However, we have heard from many Canadians who have been negatively affected. When this unprecedented pandemic broke out in the spring, Canadians who had already booked travel ended up stuck with vouchers for trips they could not take instead of getting refunds. They found themselves in a situation where they have given thousands of dollars in interest-free loans to airlines.

“We have heard from Canadians in the air travel and related industries who have lost their jobs or fear for their job security.

“We have heard from Canadians who have lost air service to their regional communities.

“Canadians are rightly angered by these developments.

“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.”

In response to Garneau’s announcement, WestJet released its own statement, saying that it will evaluate the news and “await greater clarity on what support for the aviation sector might include.”

WestJet concluded: “As we determine how to proceed in the best interests of our guests, our people and the communities we serve, we won’t be making any further comment.”

Garneau’s news comes eight months after the start of the COVID-19 pandemic, which forced airlines in Canada and around the world to ground planes and cancel the vast majority of flights. As such, IATA expects full year 2020 traffic to be down 66% compared to 2019, while total industry revenues in 2021 are expected to be down 46% compared to 2019’s figure of $838 billion.