Air Canada sitting on $2.6 billion of passenger money as House of Commons petition to refund passengers gains support.

benjicash wrote: ↑Air Canada sitting on $2.6 billion in passenger money.

OTTAWA — A growing chorus of voices is demanding Ottawa force airlines to reimburse cash-strapped travellers the cost of trips that were cancelled because of the pandemic, rather than offering a 24-month travel credit.

Just on Wednesday, support for a House of Commons petition demanding the federal government require airlines to refund trips jumped from 500 in the morning to well nearly 5,900 by late afternoon...

“These travel credits come with restrictive terms and conditions, including that they must be used within 24 months, that they are non-transferable or that they do not provide any price guarantee,” the petition reads...

“I don’t think that it’s up to the average citizen to put up $5,000, $10,000 or even $15,000 to keep a company afloat when they’d like to be able to pay their mortgage or buy groceries after possibly having lost their job. It’s not a simple situation for many people,” the Bloc’s transportation critic said.

Here's my concern...

First, I appreciate that airlines are cash-strapped due to C-19. I get that they could go broke if everyone insisted on a cash refund.

A voucher is effectively a loan from a consumer to an airline. But what a great deal it is for the airline (and what a sucker bet it is for the passenger)!

1. It's interest free. If the voucher remains valid for 24 months and I then book a flight for a year after that then it could be as much as 3 years interest-free.

2. People who've lost their jobs and now can't pay their mortgage/rent may have to take out loans at high interest rates while they're effectively loaning that money back to the airlines interest-free. That makes no sense.

3. It's a very high risk loan. After all the airline stands a high probability of going broke as the result of C-19, making the voucher worthless.

4. Even if the airline doesn't go broke they could curtail their routes such that we can no longer get from X to Y on that airline. In that situation the voucher is either worthless or worth less. We'd have to either fly entirely on another airline or fly partly on another airline, in both cases at our extra expense.

5. When we booked the flight and paid for it we entered into a contract with the airline to fly us from X to Y for $N. Now when the airline starts flying again it will likely raise airfares using C-19 as the pretext. But the voucher will be for the $N I originally paid. So in effect that voucher won't be nearly enough to pay for the flight from X to Y that we contracted and paid for.

6. Further re 5. airlines have a notorious track record for screwing passengers in creative but abusive ways. They've devalued frequent flyer miles many times. They've introduced fuel surcharges when oil price spiked up and then kept them even after the price of fuel dropped. They've applied those surcharges on "free" reward tickets. Etc. Why should anyone assume they won't find some new ways to devalue C-19 vouchers? An obvious example would be to impose a C-19 surcharge because they can't cram as many sardines in the can as they used to.

It seems to me that if an airline wants me to accept a risky voucher of undetermined actual value instead of a full cash refund then they should compensate me for the above issues. Instead of a fixed value ($N) the voucher should be for transporting me from X to Y irrespective of what the airfare might be a year or two or three in the future. I appreciate there would have to be some constraints on this like same fare class, same time of year, equivalent destination if they no longer fly from X to Y, etc. But these are details. They can be addressed.

Frankly I'm surprised that the passenger rights advocates, media, etc. haven't cottoned on to this potential for airline subterfuge. [Well it seems they finally have...Bylo

CuriousC wrote: ↑ I signed the petition

Benji I think you picked the wrong title for this thread

CuriousC wrote: ↑ DO NOT CANCEL, no matter what!

squall458 wrote: ↑ Is that for one or two tickets? Did you pay using a cc with travel insurance?

uber_shnitz wrote: ↑ Did AC specify why they canceled? Seems a bit weird considering they themselves said they'd be opening up some flights next month.

benjicash wrote: ↑ Title changed. I think the 2.6 billion is important to keep.

Air Canada has about 6 billion dollars in their account, so giving back around 2 billions for the unused fares will not damage them too much. They are also getting a boost from the federal to pay the employees. The other thing is that a lot of their planes maintenance is done out of Canada so would be better to take care of our own before spending that money elsewhere.

CuriousC wrote: ↑ Interesting maths here:
2.6 billion / 20 000 workers laid off=one hundred thirty thousand per worker.
130K/year that is high pay salary
so if you take an average 65K/year salary for that money you could feed 40K employees for a year