A plane is silhouetted as it takes off from Vancouver International Airport in Richmond, B.C., Monday, May 13, 2019. CANADIAN PRESS, Jonathan Hayward
Canada’s transport minister said forced refunds would further devastate industry
PM Justin Trudeau said there is a way to balance survival of the industry with fair treatment for consumers
OTTAWA — The federal government is signalling that it won’t force airlines to offer refunds to ticket holders for flights cancelled during the COVID-19 pandemic.
Federal transport minister Marc Garneau said Friday mandating a reimbursement on a sector that has lost more than 90 per cent of its revenue during the lockdown would basically cripple an industry that’s of vital importance to Canada.
“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,” he said.
On airline refunds, Prime Minister repeats message that it is a fine balance to make sure Canadian consumers are treated fairly, & airlines don’t face further financial devastation. Wants to make sure there is an airline industry after this pandemic #COVID19#cdnpoli
Similarly, Prime Minister Justin Trudeau said consumer concerns can be addressed fairly, but the industry’s survival must also be ensured.
“We will continue to work with the industry and with concerned groups of Canadians to ensure that we find a fair way through this. But I know Canadians at the same time want to make sure we continue to have an airline industry after this very difficult pandemic. Getting that balance right and listening to Canadians is what we will do.”
In recent weeks, Canadian consumer pressure has intensified on the likes of Air Canada and WestJet to offer full refunds instead of the flight vouchers currently used for cancelled flights. WestJet is offering flight vouchers usable within two years. Air Canada is refunding its refundable ticket holders, but those holding non-refundable tickets have been offered vouchers that don’t expire or conversion of credits into Aeroplan Miles.
Jackie Vandinther CTVNews.ca Digital Content Editor | May 27, 2020
In this March 25, 2020, file photo, passenger and cargo aircraft are seen stored at Southern California Logistics Airport, in Victorville, Calif. (AP Photo/Mark J. Terrill, File)
TORONTO — As the coronavirus pandemic brings global air travel to a near standstill, airlines around the world are facing some tough questions about how long their planes will be parked and what a longer term interruption to air travel could mean for the industry as a whole.
As of Tuesday, on the heels of months of border closures and travel bans due to COVID-19 outbreaks, there were 12,350 passenger planes in service around the world, according to figures gathered by Cirium, a data and analytics firm that specializes in the travel industry. That’s less than half the approximately 30,000 commercial aircraft that Cirium says would typically be crisscrossing the skies.
The airline industry as a whole may have entered the COVID-19 crisis in relatively good financial shape, points out George Dimitroff, the head of valuations at Ascend by Cirium, the consultancy arm of the company. “Globally speaking, the industry has had a decade of uninterrupted profitability,” Dimitroff told CTVNews.ca on the phone from New York City on Tuesday. “Airlines have accumulated cash reserves, they’ve got aircraft on their books that are fully owned,” he added. But Dimitroff isn’t denying the unprecedented situation carriers are finding themselves in, and how no one could have fully prepared for the present moment.
PARKED PLANES: WHERE ARE THEY AND WHAT HAPPENS TO THEM?
Grounding a multimillion-dollar plane isn’t as simple as parking a car in a garage and walking away. In short-term storage situations, which Dimitroff says typically last a month, a parked plane would require engine and hydraulic system checks, tests to the aircraft’s electrical and flap systems, and tire rotations. “Aircraft are not designed to sit on the ground. Their condition actually deteriorates that way,” Dimitroff said. He also said planes in short-term storage are still flown occasionally so they’re not sitting idle the entire time.
For example, WestJet was forced to ground more than 130 aircraft from its fleet to respond to virus-related travel restrictions, and was able to do so in under a week, company spokesperson Morgan Bell said in an email to CTVNews.ca. “Keeping the aircraft in warm storage treats the plane as if it is flying even though it’s not, meaning that regular maintenance intervals such as daily and weekly checks are performed on a schedule,” Bell wrote. In an email, Air Canada said it had no one available to speak on the issue when CTVNews.ca asked for the same information.
Commercial jets placed in long-term storage will also undergo these types of periodic check ups. But the longer a plane sits idle, the higher the chance more high-level maintenance or repair work is needed to keep the aircraft functional and flight-ready. Dimitroff says the aircraft’s age is also weighed as a factor in an airline’s decision to return it to service or retire it.
A “C-check,” as it’s called in the industry, is an extensive inspection and thorough set of maintenance system checks performed on an aircraft to determine its functionality and airworthiness. The frequency of C-checks can vary depending on how many flight hours a plane has racked up as well as the carrier’s operational guidelines. Depending on the type of aircraft, Dimitroff estimates the cost of a C-check inspection can run anywhere from $150,000 for a narrow-body aircraft to upwards of $300,000 for a wide-body jet.
In WestJet’s case, Bell said it takes about 60 man hours a week per aircraft to conduct the required maintenance. Multiply that process by the 17,271 aircraft that are currently parked on fields, airport tarmacs and in hangars around the world and it becomes clear how complex and costly itcan become for airlines over time.
The largest groupings of parked commercial planes waiting out the pandemic can be found in the U.S., at airports and storage locations in New Mexico, Arizona, and California, according to Cirium’s data. It’s also no coincidence these parking locations are all found in warm and arid places; the kinds of conditions considered ideal for storing sophisticated pieces of technological machinery for long periods of time without exposing them to potentially damaging elements like humidity and cold.
Bell says the bulk of WestJet’s grounded fleet is sitting in chock blocks at airports in Calgary, Toronto, Vancouver and Edmonton. That matches the storage location data collected by Cirium, which suggests there are more than 550 airplanes currently parked at Canadian airports from coast-to-coast-to-coast.
AIRLINES IN WAIT-AND-SEE MODE
While some countries around the world, including Canada, are slowly beginning to reopen their economies, it’s still unclear when travel bans and border restrictions willbe lifted or what the resumption of commercial air travel will look like. Faced with a global health crisis that has no clear end date, Dimitroff says many airlines are hesitant to make any long-term decisions that could significantly impact the future of their fleet, like deciding to convert their aircraft into freighter or cargo planes, or retiring an aircraft early. “Airlines are in wait-and-see mode right now, and are making long-term storage decisions as they need,” said Dimitroff. “They’ve already got a timeline of new aircraft deliveries and they’re trying to line that up with recovery.”
Some of the industry’s biggest players, including Air Canada, American Airlines, Delta, KLM and Lufthansa, have already made the decision to retire some of the oldest planes in their respective fleets in an effort to mitigate the long-term financial impacts of the coronavirus on their bottom lines.
The form and timing of any recovery in an industry that has lost billions of dollars due to the pandemic are hard to predict, but Dimitroff says the early signals aren’t promising. “By expert estimates, the most pessimistic scenario for a recovery to 2019 [air traffic] levels will happen by 2026,” Dimitroff said. “The more realistic best-case scenario is seeing 2019 levels in 2022,” he added. Dimitroff’s musings are in line with what other North American industry insiders are also saying; that a full recovery for air travel to pre-pandemic levels will take years to do.
Dimitroff also pointed out that how the global economy bodes as the pandemic subsides will largely dictate how the airline industry recovers. It’s believed the financial losses incurred as a result of COVID-19 will surpass the $7 billion the global airline industry lost in the wake of the 2003 SARS epidemic.
While international travel is still at a virtual standstill, Dimitroff believes there’s a chance domestic travel could make a bit of rebound in the coming months. He says industry analysts will be keeping a close eye on the next few months to see if they can get a better sense of how the rest of 2020 will play out. “The industry has hit a floor,” Dimitroff said. “If summer recovery is weak, it’s not going to trend well for the winter,” he added.
The federal government’s advisory against all non-essential international travel remains in effect. Many other countries, even those where COVID-19 case counts have been steadily declining for weeks, also have strict travel restrictions in place.
But you wouldn’t know that by looking at airline websites.
If you’re contemplating rebooking an existing flight that was cancelled amid the pandemic or making a new reservation for a future date, here’s what some of the major Canadian airlines are offering:
After facing public criticism for offering a 24-month travel credit rather than refunds for cancelled flights, Canada’s flagship carrier recently introduced expanded booking options. Through June 30, passengers can make a one-time change with no fee to all new or existing bookings for original travel dates between March 1, 2020, and June 30, 2021. As of June 15, those who booked directly with Air Canada will also be able to convert their ticket to a “fully transferrable” travel voucher that has no expiry date or turn it into Aeroplan Miles with 65 per cent bonus miles.
Air Canada says it’s working on ensuring two new options are also available to those who booked through a travel agency, including Expedia.
Customers with refundable tickets can also choose to get their money back. However, if you purchased a non-refundable ticket and decide to cancel your flight, you won’t be eligible for a refund, the website warns.
WestJet has suspended its international routes through June 25. Like Air Canada, WestJet has been offering travel credit valid for two years for cancelled flights and vacation packages.
For new flight bookings made between March 3 and June 30, you can change or cancel your trip with no fee one time if you act more than 24 hours ahead of departure.
For U.S. flights, if you cancel within 24 hours of making a booking, you get a full refund, according to the company website.
Air Transat flights are temporarily suspended until June 30. The airline says on its website it has been automatically granting travel credit valid for 24 months to customers whose flights were cancelled.
For flights and vacations in southern destinations booked between April 30 and May 31, customers get to reschedule the same trip for any time within a year of the original return date or book a new trip — with different dates, destination and hotel — at no charge up to 24 hours before departure.
Those who just want to cancel get a 12-month travel credit for southern vacation packages and flights in the lowest fare class. For those who bought tickets in other fare classes, the standard cancellation terms apply, according to the airline’s website.
Sunwing has suspended all southbound flights until June 25. Those with flights or vacation packages starting between March 17 and June 25 are eligible for travel credit valid for departures up to June 20, 2022. Notably, the company says its travel credits are non-transferable and non-refundable.
WestJet’s ultra-low-cost carrier has suspended all international flights until Aug. 31.
All new bookings made at least seven days ahead of departure will come with the ability to change the date or time of the flight up to 24 hours in advance. If you have an existing booking, you can add the flexible-booking feature to your reservation for travel that is at least seven days out.
Customers get a one-time change per direction.
Another no-frills Canadian airline, Flair, also says it has relaxed its booking policies. For those with existing reservations for flights in March, April and May, passengers can choose between a one-time chance to rebook their trip without having to pay a change fee and a travel voucher valid until May 31, 2021. You can only use one voucher per reservation, and it won’t cover costs like baggage, seat selection and other optional fees.
For new bookings made in March, April and May, you get the fee waived on a one-time rebooking for travel until May 31, 2021.STORY CONTINUES BELOW ADVERTISEMENT
Air passenger rights advocate warns against flexible bookings
Flexible bookings, travel credit and vouchers are hardly unique to Canadian airlines. Customers perusing U.S. or other international carriers will be hard-pressed to find any mention of the possibility of refunds, especially for non-refundable flights.
But air passenger rights advocate Gabor Lukacs argues that any alternative to getting your money back comes with considerable financial risk.
For one, consumers should watch out for fare increases. Often, he notes, airlines are merely waiving rebooking fees, with passengers left to cover any cost differential between their original and new bookings out of pocket.
“You will not get a flight to New York City in September for the price you paid in February,” he said via email.
Lukacs takes issue with the practice, noting that current rules under Canada’s Air Passenger Protection Regulations stipulate carriers must rebook passengers at no charge if their flight is cancelled.
Another important caveat: most airlines allow only a one-time change to your reservations. (There are exceptions: Hong Kong’s Cathay Pacific, for example, is currently allowing unlimited rebookings for some customers within certain dates.)
Also, it’s not clear what happens to travel vouchers if an airline files for insolvency.
“Vouchers holders are unsecured creditors,” Lukacs warns.
Finally, airlines are leaving it up to consumers to figure out whether they can travel. Just because you were able to book a flight to, say, Rome doesn’t mean you’ll be allowed to take the trip.
Traditionally, it’s passengers’ responsibility to make sure they have any permits or visas required to travel to their destination — and travel during COVID-19 is no different, Lukacs notes.
Ultimately, customers should get refunds, he says, adding that even consumers with a non-refundable ticket are entitled to their money back if their flight was cancelled.
European Union and U.S. authorities have said travellers have a right to refunds amid the pandemic. In Germany, the government recently announced a €9-billion (C$13.6-billion) rescue deal for national carrier Lufthansa after the European Commission reasserted in mid-May EU airlines’ obligation to provide refunds to eligible travellers who ask for them.STORY CONTINUES BELOW ADVERTISEMENT
Consumer rights advocates say Canadians are also entitled by law to a full refund for flights cancelled amid the COVID-19 pandemic.
Prime Minister Justin Trudeau has said Ottawa recognizes both “how vulnerable the airline sector is” and that Canadians are concerned about being “out-of-pocket” for airplane tickets they won’t use.
“I think we need to have some very careful discussions with airlines, with the air travel sector and, indeed, with Canadians … to try and figure out a way forward where we can ensure that Canadians are treated fairly and our airline industry remains there for when our economy picks up again,” the prime minister recently said.
“We will work with airlines and with Canadians who are concerned with finding solutions.”
WESTJET’S SUMMER SEASONAL BASE OPERATIONS IMPACTED BY COVID-19
As the demand for travel remains significantly impacted by the COVID-19 crisis, WestJet has made the difficult decision to suspend service to three seasonal bases. The summer season usually runs from late April through October, however, the start of seasonal service had been pushed back to July 3, 2020 due to COVID-19.
“Our investments in developing seasonal destinations has been a central component of domestic tourism in these markets,” said Arved von zur Muehlen, WestJet Chief Commercial Officer. “In these unprecedented times of low demand and with the ask from governments to restrict unnecessary travel, we have made the difficult decision to suspend service at select bases for the 2020 summer season.”
While record-low demand continues to affect the airline, WestJet remains committed to keeping critical lifelines open for essential travel and goods to its 38 year-round domestic airports.
“We thank all of our guests, WestJetters and airport partners in these destinations for their support and look forward to the time when we will be bringing leisure and business travellers back into these communities again.”
Service to all three seasonal destinations is planned to return in 2021. Guests affected by these seasonal suspensions, will be proactively notified of their options.
The following summer seasonal bases and routes have been suspended:
HONOURABLE JASON KENNEY, PREMIER OF ALBERTA AND MINISTER OF ECONOMIC DEVELOPMENT, TRADE AND TOURISM, TANYA FIR ADDRESS WESTJETTERS
On Friday afternoon, WestJet welcomed the Honourable Jason Kenney, Premier of Alberta and Minister of Economic Development, Trade and Tourism, Tanya Fir to WestJet’s Alberta headquarters. We were pleased the Premier and Minister were able to virtually meet with WestJetters to provide an overview of Alberta’s current situation, actions taken by the government to manage COVID-19, what the path forward looks like and the role WestJet will play in leading Alberta’s economic recovery.
For highlights from the visit please see the following video available for download here. We ask that media please reach out to Government of Alberta with any further questions on the special visit.
BOOK WITH CONFIDENCE
Guests can continue to book new flights with confidence as we’ve extended our flexible change/cancel policies for new bookings until June 30, 2020. More on our current policies available here.
REPATRIATION FLIGHT SCHEDULE
This week WestJet, in collaboration with Government of Canada, will operate its 23rd repatriation flight for Canadians from El Salvador to Toronto.
Wednesday, May 27 – San Salvador, El Salvador to Toronto
CALGARY – WestJet Airlines Ltd. is asking the federal labour minister for an exemption to Canada Labour Code provisions that would facilitate mass layoffs.
An April 27 letter to Labour Minister Filomena Tassi, signed by vice-president Mark Porter and obtained by The Canadian Press, states that WestJet expects to cut some employees and that the provisions are “seriously detrimental” to its operations and “unduly prejudicial” to the company and its staff.
Chris Rauenbusch, a union official who represents WestJet flight attendants, disagrees.
A labour code exemption would void the requirement of 16 weeks notice for terminating more than 50 workers, opening the door to group layoffs that are effective immediately, he said in an email.
The exemption would also nix the need to engage in a union-employer planning committee to develop an adjustment program to reduce layoffs.
“An adjustment plan that minimizes the impact of termination and assists employees in obtaining other employment is particularly important in all cases where there will be a reduction in the workforce,” Rauenbusch said in a letter to Tassi on April 28. Shared work schedules, furloughs and training for new roles are all possible outcomes.
A labour code exemption would scrap the union’s ability to request federal arbitration should the committee fail to yield fruitful solutions, he added.
The company said in an email Thursday the exemption would give it flexibility “to act in a timely manner” amid the COVID-19 pandemic that has tanked travel demand across the globe.
While Air Canada said last week it will lay off about 20,000 employees, WestJet said Thursday it has “not made any decisions to move ahead with terminations.”
Dustin Fitzpatrick, a spokesman for the Labour minister, said in an email that any decision by the government “will ensure workers’ rights mandated under the code are protected.”
WestJet said on April 22 — less than a week before it reached out to the labour minister — that it planned to lay off 3,000 people as the virus continues to pummel the airline industry, with the company’s passenger numbers now hovering at less than five per cent of last year’s.
The layoffs came in spite of the federal wage subsidy that covers 75 per cent of a worker’s normal hourly wages or up to $847 per week. WestJet had committed to the Canada Emergency Wage Subsidy program through June 6.
Though a boon for battered companies, airlines that draw on it still have to pay into pension and benefits funds, a drain on airlines that continue to bleed cash through other fixed costs such as maintenance and airport fees.
WESTJET ADDS REPATRIATION FLIGHT FROM SAN SALVADOR, EL SALVADOR
WestJet, in collaboration with Government of Canada, has added a new flight to repatriate Canadians from El Salvador to Toronto on Wednesday, May 27.
The flight will mark WestJet’s 23rd repatriation flight in collaboration with the Government of Canada.
Repatriation flight schedule
Sunday, May 24 – Bridgetown, Barbados to Toronto
Wednesday, May 27 – San Salvador, El Salvador to Toronto
Non-contact temperature scanning has been extended to WestJet’s entire domestic network to aid in a more seamless and reliable execution of the Transport Canada interim order. This screening further supports the government-mandated health questionnaires that are already in place for guests.
Prior to boarding, temperature screening is conducted using a safe, non-contact infrared thermometer. Before implementing this new process across all 38 domestic stations, WestJet trialled non-contact temperature scanning at its three hubs in Calgary, Vancouver and Toronto from May 11-15 to gauge its operational feasibility. See how WestJet’s non-contact temperature scanning works in this video here.
WestJet, in collaboration with Government of Canada, has added a new flight to repatriate Canadians from Bridgetown, Barbados to Toronto on Sunday, May 24.
This weekend’s flight will mark WestJet’s 22nd repatriation flight in collaboration with the Government of Canada. To date, WestJet has returned more than 3,000 guests’ home.
WestJet is reviewing LEEFF program specifics to determine our next steps.
The closure of borders and a reduction of almost 90 percent of our passenger traffic due to the COVID-19 pandemic has dramatically impacted the financial welfare of our airline. As a responsible company we continue to take actions to preserve and protect our future to mitigate the impacts to our employees, operations and our investments in communities across Canada.
HEALTH AND SAFETY UPDATES AVAILABLE ON THE WESTJET BLOG
Since the onset of the COVID-19 pandemic we have been taking many extra steps to ensure the safety of our guests and our crew and will continue to do so for the foreseeable future. Read more about all safety measures and initiatives here.
GENEVA – The International Air Transport Association has proposed a series of measures aimed at relaunching the global air travel industry, including the mandatory use of facemasks, a ban on lining up for onboard washrooms and an end to physical distancing.
The organization says passenger face coverings remove the need for social distancing on board, which it defines as leaving middle seats open.
The association’s roadmap to restarting commercial flights — which have dropped off by more than 90 per cent among major Canadian airlines — argues that seats provide a barrier to viral transmission and that air filtration systems are equivalent to those at hospital operating theatres.
Nonetheless, the trade group supports prohibiting washroom lineups to reduce what it calls “congregation of passengers” in the cabin.
Air Canada and WestJet Airlines Ltd. — both of which the association counts among its 290-odd members — say their pandemic policies block the sale of adjacent seats in economy class or throughout the entire plane.
Transport Canada listed social distancing among the “key points” in preventing the spread of the virus as part of a guide issued to the aviation industry last month.
This report by The Canadian Press was first published May 19, 2020.
By James Jackson, Record Reporter | Sat., May 16, 2020
BRESLAU — Take a drive south along Fountain Street North near the town of Breslau and you’ll eventually pass the Region of Waterloo International Airport. There you’ll see signs of how the global pandemic has hit the airline industry.
About 250 private planes are securely tied to their moors, and the nearly 30 planes that make up the local flight school remain grounded. To top it off, more than half a dozen blue, white and orange Sunwing Boeing 737-800 jets are parked on the runway and tell the real story of an imperiled industry.
As of early April, the International Air Transport Association — which represents about 290 airlines and 82 per cent of global air traffic — said the number of flights globally was down 80 per cent compared to 2019, largely due to strict travel restrictions imposed by countries trying to slow the spread of the virus.
Some in the industry have called it the worst crisis in the history of aviation. Worse than the financial crisis of 2008. Worse than the SARS outbreak in 2003. Worse than the terrorist attacks of Sept. 11, 2001.
Aside from two WestJet flights per week to Calgary on Thursdays and Sundays and the occasional private flight, the once-bustling regional airport feels like a ghost town.
Region of Waterloo International Airport general manager Chris Wood said before the pandemic hit the airport could see 1,000 plane movements (takeoffs or landings) on a nice day, but lately they’ve been lucky if they hit 100.
“It’s been devastating for the industry worldwide,” said Wood. “We haven’t seen anything like this, and it happened so quickly.”
Up in the air
No one really knows how this pandemic will play out or how the industry will weather the uncertainty.
“If you have a crystal ball, can I borrow it?” joked Wood.
Air Canada recently reported a $1-billion loss in the first quarter of 2020 compared to a $345-million profit in the same period last year, and chief executive Calin Rovinescu called it the “darkest period ever” in the history of aviation.
The company is burning through $22 million every day paying rent, interest and other expenses. The company had about $6.5-billion in cash at the end of March, enough Rovinescu said for the company to emerge on the other side of the crisis.
Long-term forecasting is fraught with uncertainty and there are a lot of variables to consider. Perhaps none are bigger than trying to predict the human response to this pandemic.
Tens of millions of people around the world have spent weeks and months in strict lockdowns that have shuttered most non-essential businesses. But the highly infectious virus is still lurking, and there is no vaccine.
Just how many people are ready and eager to jump on a plane under those conditions is anyone’s guess.
“Many people won’t want to travel until they feel confident they can travel safely in a confined space,” said William Morrison, an associate professor in business and economics at Wilfrid Laurier University and co-editor of the Journal of Air Transport Management. He is also a research fellow at the Centre for Transportation Studies at the University of British Columbia.
Morrison predicts demand for air travel will remain muted until either a vaccine is available, or testing and monitoring is more widespread. This is especially true for the leisure or vacation market where spending is more discretionary and price sensitive.
“Ultimately it’s a matter of confidence — the public has to feel confident that they’re not at risk,” he said.
Business travel may rebound more quickly, but even the fate of in-person business meetings could be up in the air after employees have spent the past few months proving to themselves and others that much of what they do can be done with a computer screen and a reliable internet connection.
“It’s likely that many aspects of business travel may not rebound,” Morrison said.
Another major factor in how quickly people get back in the air is price.
Could airlines be required to leave a certain proportion of every flight empty to help promote social distancing aboard their jets? Some carriers have already begun leaving middle seats empty, but the European Union has recently stated it will not be a requirement.
Airlines use what is called the “Break Even Load Factor” to determine how many seats on every flight an airline needs to sell in order to break even or make a profit. A number of factors, including ticket price and fuel costs, can affect that percentage.
Morrison said one major Canadian carrier breaks even when about 75 per cent of the 737-800 jets it flies are full, and prior to the pandemic it usually sold about 85 per cent of seats.
But if they were to lose a third or half of their seats to help keep passengers apart in the air, ticket prices or baggage fees would likely have to go up.
Maybe this is an opportunity for the industry to reflect on its huge growth in recent decades, Morrison conceded, and address some of the growing concerns around international air travel — namely, its impact on the environment.
He pulled up a graph showing the steady rise in worldwide passengers between 1970 (less than half a billion) to 2019 (just over four billion). He highlighted economic shocks that have impacted the industry in the past — the Iran-Iraq War in 1980, the Gulf War a decade later, the Sept. 11 terror attacks and the 2008 global financial crisis.
Each was a shock to the system at the time, but when viewed over five decades those jolts appear more as small patches of turbulence followed by years of relatively smooth (and increasingly rapid) growth.
Is the pandemic just another blip on an otherwise smooth trajectory? Or will it become something more?
Suzanne Kearns, an associate professor of geography and aviation at the University of Waterloo, is optimistic the industry will eventually recover from the COVID-19 pandemic as it has from other shocks, but what that recovery will look like is less clear.
One possibility is a V-shaped recovery where travellers who have spent months in social isolation and are desperate to travel again flock back into airports and generate a quick recovery.
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The other is a U-shaped recovery where travellers — whose spending may be hampered by higher prices and a possible global recession, and who also remain worried about the virus re-emerging — are slower to return to the skies.
The airline industry is a vital economic driver, she added, and each of the 2.7 million jobs in the industry around the world supports 24 more jobs in other areas of the economy.
Like Morrison, however, Kearns said a lot relies on how safe travellers feel inside airport terminals and aboard planes.
“How do you make these spaces safe? I don’t know if masks or gloves alone are enough,” she said.
The role of Waterloo Region’s airport
All of this uncertainty raises questions about how Waterloo Region’s airport will be impacted.
Three years ago, the regional government released a master plan that laid out possible expansion plans for the facility.
It projected Pearson International Airport would reach its maximum capacity of 70 million annual passengers by the mid-2030s and smaller, regional airports like Waterloo’s would be key in absorbing the overflow.
The $375-million expansion and modernization plan was written to guide the next two decades of growth at the local airport, including runway expansions. The first phase of the expansion wouldn’t be triggered until the airport saw 250,000 passengers per year, or about four 737 passenger jets every day.
In 2018, only about 80,000 passengers went through the airport.
Regional councillor Sean Strickland said with the global uncertainty around the future of air travel it might be wise to review that plan.
“I think the numbers still make sense, but the time frame I think needs to be extended,” said Strickland.
He noted how even prior to the pandemic the local airport was struggling to attract business and relied on about $6 million from the region each year. Over the past decade, the region has also lost service from carriers such as American Airlines, Bearskin Airlines and Arctic charter Nolinor.
Strickland said the region should consider selling or leasing the property to the private sector, a position he held even before the pandemic hit.
That all hinges on the results of an ongoing service review at the region, he added.
Tony LaMantia, president and CEO of the Waterloo Region Economic Development Corporation, said the airport is critical for the success of the region. In 2015, the economic impact of the airport on the regional economy was an estimated $90 million.
“If you believe in growth for the region, you have to believe in YKF,” he said, referring to the airport’s location indicator code. “Waterloo Region will not be as vibrant or successful without the airport infrastructure.”
Yet even LaMantia noted it might be time to re-examine the master plan to ensure it makes sense post-pandemic.
“You’ll have to dust off the master plan and look at the impact,” he said.
Woods said Toronto’s Pearson airport saw 50 million passengers last year but that could plummet by as much as 30 million this year.
“I don’t think we’ll get back to ‘normal’ until the vast majority of us are immune,” he said. “How long that takes, well your guess is as good as mine.”
Author of the article: Emily Jackson • 14 May 2020
As Canada’s largest airlines cut capacity and cancel dozens of routes even as summer travel season approaches, airlines and travellers on both sides of the Atlantic are continuing the debate over whether passengers with travel plans foiled by COVID-19 are entitled to full refunds or vouchers for future travel.
On Wednesday, the European Commission confirmed passengers have the right to full refunds within seven days despite pressure from 16 member states to temporarily relax the regulations to allow for vouchers so cash-strapped airlines don’t collapse.
Instead of amending the rules, the European Commission issued a non-binding suggestion that airlines offer more attractive vouchers, refundable after one year and transferable to another traveller.
The decision outraged European airline associations, who have decried the commission’s decision given airlines have no cash coming in yet and are facing up to €9.2 billion in cash reimbursements through the end of May, according to the International Air Transport Association.
The IATA noted the refund rules were not designed to deal with mass cancellations caused by a global pandemic — and emphasized that Canada allows the voucher approach.
“While passengers have a clear right to reimbursement of their tickets, we believe refundable vouchers, or a delayed reimbursement, represents a fair and reasonable compromise given the unprecedented liquidity situation airlines are currently facing,” Airlines for Europe managing director Thomas Reynaert said in a statement.
The United States also requires airlines to provide refunds when the carrier cancels or significantly changes a passenger’s flight, but customer complaints about refunds have soared since the pandemic.
On Tuesday, the U.S. Department of Transportation said it received 25,000 complaints in March and April, up from a typical 1,500 complaints per month. The department issued its second enforcement notice on the matter since travel restrictions began, reminding airlines that they may offer vouchers as long as they also give customers the option of a refund.
“The department is asking all airlines to revisit their customer service policies and ensure they are as flexible and considerate as possible to the needs of passengers who face financial hardship during this time,” U.S. Secretary of Transportation Elaine Chao said in a statement.
The issue is particularly charged in the U.S. given the federal government’s US$50-billion bailout for major airlines.
Meanwhile in Canada, full refunds are but a wish for customers who booked standard tickets since cancelled. Instead, most Canadian airlines are offering 24-month travel vouchers.
Canada’s air passenger protection regulations require airlines to ensure customers can complete their trips when flights are cancelled for reasons outside the airlines’ control, but they do not mandate refunds in such circumstances.
In late April, the Canadian Transportation Agency said the vouchers could be a “reasonable approach in the extraordinary circumstances.”
“Vouchers for future travel can help protect passengers from losing the full value of their flights, and improve the odds that over the longer term, consumer choice and diverse service offerings — including from small and medium-sized airlines — will remain in Canada’s air transportation sector,” it stated.
Passengers can file complaints with the CTA if they believe they are entitled to a refund, although the agency has paused all dispute resolution activities until June 30. It did not respond to questions on Wednesday on how many complaints have been filed.
The National Airlines Council of Canada, which represents Air Canada, WestJet, Jazz and Transat, supports the CTA’s guidance that vouchers are acceptable given the financial and operational crisis the pandemic caused.
“The industry is reeling from the unprecedented impact of the COVID-19 pandemic, with over 90 per cent of capacity pulled from the market, billions of dollars worth of aircraft parked, and virtually no revenue coming in,” NACC president Mike McNaney said in an email.
But some passengers hope to band together to get their money back in court. In April, a plaintiff filed a proposed class action lawsuit against Air Canada, WestJet, Transat, Swoop and Sunwing. It argues customers are entitled to refunds under contract law for frustrated contracts. The defendants have yet to file a statement of defence and the action has not yet been certified.
For its part, WestJet, which on Sunday announced it would suspend three dozen routes between June and July, said it “values the feedback we are receiving from our guests and appreciates how difficult this unprecedented situation is for all.”
The airline is monitoring the legal frameworks in every jurisdiction it operates, a spokesperson said in an email, adding it has waived rebooking fees and extended vouchers to 24 months.
Air Canada is offering refunds to customers who bought refundable tickets and offering 24-month vouchers to the rest.