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Master thread Air Canada Refunds vs credits; Class action lawsuit filed

Old Dec 10, 2020, 7:55 pm
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As of April 13, 2021 (in conjunction with the federal government bailout), AC is providing refunds for flights cancelled due to COVID, which applies to tickets with travel after February 1, 2020, and purchased before April 13, 2021. This includes flights cancelled by customers rather than AC.

Going forward (i.e. tickets purchased on or after April 13, 2021), cancelled flights will be refunded if AC does not offer a re-booking option with departure +/- 3 hours from the original time.

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Master thread Air Canada Refunds vs credits; Class action lawsuit filed

Old Apr 4, 2020, 2:47 am
  #61  
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Originally Posted by skybluesea
And why should this only apply to AC? How is it that airlines must provide refunds, but other travel providers NOT required? e.g. had to cancel Hotel booking but NO refund? Gov't should fix this too
What?

Originally Posted by gcashin
Most of the examples are where AC has cancelled the flights and is refusing to provide a refund, rather than situations where the customer has voluntarily cancelled.
Yeah, exactly.

If a hotel shuts down, I get a refund. If the hotel is open and I choose to cancel, I don't.

If AC cancels my flight, I should get a refund. If I decide not to fly on my own, I shouldn't.
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Old Apr 4, 2020, 4:38 am
  #62  
 
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I just got off the phone with AC and they have offered to refund the prorated amount of my thoroughfare that was cancelled. The agent even submitted the request for refund of those segments on my behalf. I was not expecting that outcome at all. Disappointed I have to fly Westjet for that leg though.

She stated, almost verbatim, what Cow said above.
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Old Apr 4, 2020, 7:25 am
  #63  
 
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I know my daughters YUL to BRU flight on April 24th is cancelled. They are not flying that route at all right now. But we have not heard one word about it. Of course we are just sitting and waiting for the email to drop. It feelsl ike they are hedging their bets by handling cancellations this way.
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Old Apr 4, 2020, 8:54 am
  #64  
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Last edited by skybluesea; Dec 21, 2020 at 1:30 pm
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Old Apr 4, 2020, 9:33 am
  #65  
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Originally Posted by skybluesea
As far as I'm concerned, these are extraordinary times where a new normal will emerge and the contractual rules of the game maybe no longer be enforceable.
Yet to be seen. The EU came out with guidance against issuing vouchers instead of refunds. They haven't yet really stepped up to enforce it, but they did make their position clear. And the European airlines are at least making the credits refundable if unused at expiry, unlike AC. And the US DOT came out with very strong action in the last couple of days.

We just need the Transport Ministry or CTA to do the same for us. Write your MP, Garneau, and CTA.

If I end up being an AC unsecured creditor - won't be happy about it, but not the end of the world if my +/- $12k credits evaporate.
Unlikely - see this post for detailed analysis.
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Old Apr 4, 2020, 9:58 am
  #66  
 
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Originally Posted by skybluesea
As far as I'm concerned, these are extraordinary times where a new normal will emerge and the contractual rules of the game maybe no longer be enforceable. If I end up being an AC unsecured creditor - won't be happy about it, but not the end of the world if my +/- $12k credits evaporate. I'm far more concerned about future taxation levels that would cripple the ability for after-tax dollars to flow to what is mostly a discretionary spend at Air Canada.

most important, please stay safe !
you seem very concerned about your many dollars going through tax to people who are less lucky or not as in a good position than you. We're all in this together.
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Old Apr 4, 2020, 10:37 am
  #67  
 
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Meanwhile in the USA... DOT: Airlines must give refunds - not just vouchers - when flights are axed amid coronavirus.
https://www.cnbc.com/2020/04/03/coro...-are-axed.html
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Last edited by maple; Apr 4, 2020 at 10:39 am Reason: Wrong font size
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Old Apr 4, 2020, 10:52 am
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Originally Posted by skybluesea
As far as I'm concerned, these are extraordinary times where a new normal will emerge and the contractual rules of the game maybe no longer be enforceable. If I end up being an AC unsecured creditor - won't be happy about it, but not the end of the world if my +/- $12k credits evaporate. I'm far more concerned about future taxation levels that would cripple the ability for after-tax dollars to flow to what is mostly a discretionary spend at Air Canada.

most important, please stay safe !
If AC wants people to voluntarily take credits now when they're entitled to refunds for cancelled flights, they should make the terms more reasonable. If I take a future travel credit instead of a refund:
  • I need to call AC Reservations to rebook; typically for anyone without SE status, that can mean a couple hours on the phone
  • Promo codes can't be applied to phone reservations and many of AC's routine sales require promo codes
  • The $ amounts can't be transferred between pax
  • If the new ticket is less, I lose the residual value
  • Insurance coverage on the new ticket may be less clear and may not apply or may be more difficult to claim depending on credit card insurance terms
If AC wants people to voluntarily take travel credits where the regulations say they're entitled to refunds, they should make the terms of travel credits more attractive. Offer a cash refund, or if you choose to take a travel credit, it becomes the original amount +10%, for example. Stop this garbage about how AC keeps the residual value if the new ticket is less.
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Old Apr 4, 2020, 10:53 am
  #69  
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Last edited by skybluesea; Dec 21, 2020 at 1:30 pm
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Old Apr 4, 2020, 11:01 am
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Old Apr 4, 2020, 11:12 am
  #71  
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Originally Posted by skybluesea
If this happens, then basically with the massive AC bail-out soon to come these refunds just become a flow of future taxation to wealthier Canadians.
I would prefer to see AC preserve cash, as such less the bail-out will be.
And less the bail-out, this will mitigate taxation impacts which leaves more after-tax dollars in the hands of potential AC customers.
Please see the post I linked to in the other thread. Un-refunded non-refundable credits are not actually that big in the scheme of AC's financial position. They're scrapping for every dollar they can right now (as I would be, if I were in their shoes), but if they're getting a "massive" bail-out - of what, $2 billion? $1.5 billion? - $200MM of something like that in travel credits isn't a very big deal.

Even if it means the bailout has to be slightly bigger, I think it's preferable, because I don't like the precedent sets that an airline, or any business, can simply abuse its customers by ignoring its own policies and contracts, as well as regulations as they're generally understood prior to the crisis.

Somehow magically when AC gets a bail-out, and everyone knows its coming, some folks appear to believe this will NOT somehow be affected by the level of cash reserves available to AC - that in part will depend on the level of refunds vs credits.
No, not everyone knows a bailout is coming. AC's cash position was very strong, as was its overall financial position, going in to this mess. It may be that general wage subsidies and other programs, along with their strong balance sheet, and possibly some private sector financing, will be sufficient to get AC through this.

Or maybe it won't and there will be a bailout. But this situation is volatile, there's really nothing certain beyond the next few days.

btw...let's do a little poll...how many FTers here willing to stop flying AC because of this credit policy, if it sticks? My guess is remarkably few, and for those who mostly fly on OPM, I suppose the poll question is NOT relevant.
Since most airlines have similar policies these days, I'm simply not giving money to any airline at the moment. If their refund policies weren't so crappy, I would happily be committing dollars to trips in the summer/fall right now, but because they're all trying to screw us out of refunds, I'll just hold on to my money.

It's amazing how much smaller my credit card bills are when my spending on airfare is net negative.

Originally Posted by skybluesea
Not clear to me which Regulations you refer to?
https://www.otc-cta.gc.ca/eng/statement-vouchers

Short of successful challenge to Federal Court, CTA statement here stands.
The CTA's statement isn't definitive. It says that "any specific situation brought before the CTA will be examined on its merits" and that credits are acceptable, "generally speaking".
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Old Apr 4, 2020, 11:36 am
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Originally Posted by Adam Smith
Since most airlines have similar policies these days, I'm simply not giving money to any airline at the moment. If their refund policies weren't so crappy, I would happily be committing dollars to trips in the summer/fall right now, but because they're all trying to screw us out of refunds, I'll just hold on to my money.
My position exactly, and no doubt for many of us here.

AC already has thousands of dollars of my money from flights purchased in good faith and then cancelled by them. Like the deflated seats situation, I see no reason to further encourage their indifference towards their 'valued' customers by booking more flights. At least not anytime soon.
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Old Apr 4, 2020, 12:57 pm
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Originally Posted by Adam Smith
First of all, there's no need for your antagonism, nor your condescension. I'm not "defending" AC. I'm merely pointing out that you're treating this issue as black and white, when it's very grey. You're using 20/20 hindsight to say that all sorts of things were clear when they were volatile and uncertain.

Flights to Italy were allowed right up until they weren't. AC didn't know what flights it was going to operate until the bans came in. Until flights were banned, they were permitted, so should AC not have been allowed to sell seats on those flights? In mid-February, do you think AC knew that it would be allowed to operate to FCO on March 13th (or whatever the last day was), but not on the 14th? In many cases, governments didn't even make these decisions until hours or minutes before they were announced. In some cases, they didn't even really know what they were announcing when they announced them (hello, US ban on flights from Europe). So how do you expect an airline to know what a government is going to do?

I don't see it as AC's job (or any other airline's job) to put warnings on the website about things that people should be reading in the news anyway. Someone who purchased a ticket to FCO on March 1st for travel on March 15th, let's say, should have known that COVID-19 was a growing problem and that there was a risk. What would the warning have said? "Flights to Italy are at high risk of being cancelled because of COVID-19"? On what date should AC have started to display that? February 17th? 12th? 21st? March 2nd? I flew YUL-FCO on March 6th, and at that time, the number of cases in Italy outside of the hot zones in the north was tiny, and the talk was around how they were doing a good job of keeping the north quarantined and limiting the spread in the rest of the country. The next day, they realized the problem was much bigger than they thought, and announced that as of the 8th, they were closing all museums etc around the country. And a few days after that, total lock down nationwide. But you think that AC should have known about that two or three weeks earlier? I don't think they were surprised by the ban when it came, but I think it unreasonable and unrealistic that you expect them to have had such good foresight several weeks before.

I think you significantly underestimate how difficult these things are to predict and how fast they change. In addition to the Italy example above, my wife is a nurse in a quasi-management role at the ER of one of the hospitals in YYC. The other day, she was telling me about Alberta Health Services' model's prediction of the peak of cases in Calgary from the run earlier that day (which had changed a bunch from the previous day). Barely had she finished telling me that when she got an update on the afternoon/evening run, and the peak had shifted by nearly two weeks and number of cases at the peak changed significantly. In an environment as volatile as that, no business can have the level of certainty you're ascribing to AC.

Even if AC had put a warning on the website that flights to some of these locations, or even all flights, were at higher risk of being cancelled due to COVID-19, what do you think that would have done? Someone booking a ticket to FCO on March 1st for travel on March 17th, do you think a little red warning box on the AC website would have changed their purchasing decision? Someone buying a YYC-YVR for April 18th? Let's get real, a little box in red text warning about COVID-19 wasn't going to tell them anything they didn't know.

AC is at fault for refusing to refund customers' money after cancelling their flights. That's a decision that's in their control and doesn't rely on some crystal ball. And it really doesn't matter when those tickets were purchased (unless it was on or after March 19th, when one could argue that customers were forewarned that there would be 24-month credits instead of refunds for involuntary cancellations). That's really the issue here.
.
The issue is not grey because the Canadian courts have already established that;
1. An entity which engages in an activity of specialized expertise is held to a higher standard of care than a layperson. Air Canada is in the business of air transportation. The subject of pandemics and the potential for travel suspension was both known to the airline and should have been modeled for by the airline.

2. Whether or not an activity is "legal" , does not relieve a person or an organization of the duty of care.

This is not hindsight. The people who had hands on experience in the last SARS epidemic had warned what would happen. Airlines had modeled for this event using the SARS and H1N1 flu experience. This was not a "surprise". Do not confuse, our collective failure to have been prepared with an event that could not be anticipated.

Yes, there were some people who had dismissed the infection. We even saw it in the forum with one person who kept insisting this was much ado about nothing. However, this does not relieve a company of its duty of care. The USA instituted travel restrictions at the end of January. There had been pressure to do this weeks earlier. Once the travel restrictions started to apply, that in itself heightened the obligation to read the airline pandemic plan. Anyone who has read the most basic of pandemic plans would have known travel restrictions and bans would be implemented once the infections took off.

Your defense assumes that Air Canada was an innocent party, a victim. I counter that the airline has a long history of intentionally not investing in IROPS and crisis planning. Look at what happens during a weather disruption. It's always the same outcome because of inadequate staffing, cancellations with no response , long call center waits etc. The justification given is that the events are infrequent and that it is not cost effective to have a capability to respond in a timely manner. Air Canada calculates the cost of risk that attaches to such a position. The disorganized response to the travel restrictions and the ongoing sale of tickets, is IMO just another manifestation of the Air Canada business model. Yes, I do appreciate that this was an extraordinary event and that the airline was overwhelmed. This is why there was even more justification for a phased scaling back of operations. The airline did not do that. I read this week that the airline has now provided its employees with appropriate safety garments. Nothing like a couple months delay. The customer service failures along with the refusal to refund airfares in a timely manner are a direct outcome of business management decisions that did not appear to consider the impact of a pandemic. AC responded in the same way it does when there is a snow storm. The difference here is that this wasn't something that went away after a week or so.

I again emphasize my belief that Air Canada was aware of the impact of a pandemic and that the modeling methods and scenario analyses were known right down to the potential for obligatory flight cancellations. I see your comment about the modeling of patients. Note that the health system models rely on different data sets. The business model projects business impact from a pandemic. Comparing outcomes is not a valid comparison. The airline pandemic models were big picture scenarios. For example, if we take one of the older plans for pandemic like the US government's 2006 Flu Pandemic plan, the reference to travel restrictions is very obvious; Measures to limit domestic travel may delay the spread of disease. These restrictions could include a range of options, such as reductions in non-essential travel and, as a last resort, mandatory restrictions. This is why modeling plans would have included a worst case scenario of mandatory restrictions.

You state that you " don't see it as AC's job (or any other airline's job) to put warnings on the website about things that people should be reading in the news anyway"


I will leave to people to consider such a position, but that is not particularly reassuring. The "news" did mention travel restrictions. It also mentioned that airlines had been providing refunds on cancelled flights. It is not an unreasonable leap of faith that consumers who would purchase an airline ticket would expect that the airline would honour the contract of sale or at the very least refund the airfare in a prompt and timely manner if the flight was cancelled.

Your argument allows for a company to behave in a dishonest manner. (I am not accusing AC of dishonesty, but am pointing out that the argument supports dishonesty.) Your defense would allow an airline to sell a ticket, then cancel the ticket and offer the customer a "credit" for a portion of the unused portion, all the while holding on to the money (the float). A cynic might call that "kiting". The method is unfair because the customer had contracted to fly at a specific time, and more importantly, the Air Canada credits typically have an expiration date. There is no certainty that Air Canada customers who have these settlements will be fairly compensated or will even be able to collect the monies owed.

I don't believe that Air Canada has acted in good faith and that it would be more appropriate if the airline was transparent and just admitted that it doesn't have the liquidity to pay, and that it asks for customers' understanding. Most people would help or be patient if the airline wasn't giving the impression of screwing around.
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Old Apr 4, 2020, 8:15 pm
  #74  
 
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the question on whether Air Canada should have continued to operate flights or allow bookings is a bit out of topic with regards to the subject of this thread (refunds)
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Old Apr 4, 2020, 10:00 pm
  #75  
 
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How do I get my refund? I don't want a credit. I have 8 latitude tickets that they won't refund.
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