Rejoice: Air Canada Will Finally Issue Refunds!

Rejoice: Air Canada Will Finally Issue Refunds!

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Air Canada has just secured significant financial support from the Canadian government. For consumers the biggest implication here is that Air Canada will finally be issuing cash refunds for tickets canceled due to coronavirus. So let’s talk about that first, and then we’ll talk about Air Canada’s relief package.

Air Canada will offer customers ticket refunds

Air Canada has been awful about issuing refunds for tickets canceled due to coronavirus, but that will be changing retroactively as part of this agreement.

If you canceled a non-refundable ticket due to coronavirus and didn’t travel, Air Canada will finally be giving you the option of a refund to your original form of payment. This applies as of today (April 13, 2021), and can retroactively be applied to tickets dating back to February 2020. You can start your refund request here.

Understandably this has been a huge pain point for customers, so it’s great to see that Air Canada is finally doing the right thing. If a family saved money for a big trip to Europe last summer, Air Canada was potentially holding onto thousands of dollars that belonged to them.

At the same time, I kind of understand the situation Air Canada was in — unlike US airlines, Air Canada hasn’t gotten tens of billions of dollars of support, and using its little liquidity to offer refunds wasn’t a priority.

But now the right thing is being done, though even if it’s ~14 months late. And this could be to the tune of up to $1.4 billion in refunds.

Air Canada will finally be issuing customer refunds

The details of Air Canada’s bailout

Air Canada has received a financial package from the Canadian government, including both repayable loans that Air Canada will only draw down as required, as well as an equity investment. This is broken down as follows (all amounts are in CAD):

  • Gross proceeds of $500 million for Air Canada shares at a price of $23.1793 per share
  • $1.5 billion in the form of a secured revolving credit facility that’s secured by the assets of Aeroplan, at a 1.5% premium to the Canadian Dollar Offered Rate (CDOR); as usual, the loyalty program saves the day for airlines
  • $2.475 billion in the form of three unsecured non-revolving credit facilities of $825 million each, at a 1.75%, 6.5%, and 8.5% premium to the CDOR
  • $1.4 billion in the form of an unsecured credit facility tranche to support customer refunds of non-refundable tickets, with an annual interest rate of 1.211%
  • Air Canada issued an aggregate of 14,576,564 warrants exercisable for the purchase of an equal number of Air Canada shares, subject to customary adjustments, at a price of $27.2698 per share during a 10-year term

In addition to issuing refunds to customers, Air Canada has agreed to the following other commitments:

  • Air Canada will resume service to nearly all regional communities where service was suspended due to the impact of COVID-19 on travel
  • Air Canada will restrict certain expenditures, and restrict dividends, share buybacks, and senior executive compensation
  • Air Canada will maintain employment at levels which are no lower than those as of April 1, 2021 (which isn’t saying a whole lot)
  • Air Canada will follow through on its acquisition of 33 Airbus A220 aircraft, manufactured at Airbus’ Mirabel, Quebec facility

Air Canada is agreeing to acquire all of its Canada-build Airbus aircraft

Bottom line

Air Canada will finally be receiving some significant support from the Canadian government, in the form of repayable loans and an equity investment. It’s something the airline desperately needed, especially with travel in Canada still being so restricted, and no recovery in sight.

Most significantly for customers, this also means that the airline will issue refunds for non-refundable tickets that have been canceled due to the coronavirus pandemic, dating as far back as February 2020.

What do you make of Air Canada’s financial package from the government, and the airline finally issuing refunds?

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  1. Heera

    I have booked a family trip to S. Korea to fly with Air Canada but used Expedia for booking. Almost $6K was paid. After many calls to Expedia and Air Canada for over a year, was happy to hear that AC will finally refunding the money. However, the battle to get through Expedia has been a nightmare with over 2 hours of wait time, and while waiting the call would hang up. I would call...

    I have booked a family trip to S. Korea to fly with Air Canada but used Expedia for booking. Almost $6K was paid. After many calls to Expedia and Air Canada for over a year, was happy to hear that AC will finally refunding the money. However, the battle to get through Expedia has been a nightmare with over 2 hours of wait time, and while waiting the call would hang up. I would call AC and they would just tell me I had to go through Expedia to initiate a refund. Finally last night I was able to get someone from Expedia to tell me that the refund was initiated but it would take 2 months to get the refund and it won't be 100% refund. They will refund minus the commission that was paid to Expedia. On AC website, it states they would refund the money and would not recall the commission. So do I need to ask Expedia to pay me back the commission?

  2. Gayle

    I called up Priceline this evening - was on hold for 1 minute and they processed the refund right away. Painless. Relieved. Made me cry a little - reminder of a missed family vacation w/ my kids (to St Johns!) but nice closure too.

  3. Susan M Sundahl

    Want more than anything for WestJet and JetBlue to start returning. Have close to $1,000 tied up between the two.
    Susan
    MSP

  4. Brendan

    Does anyone have an update on Air Canada refunds booked through Expedia? I was on hold for 3 hours this am before I gave up. NEVER book anything on Expedia. You can use them to find flights but then go on the airline website directly and book.

  5. Drew

    Wanted to add a data point. I submitted my refund request April 13 using the online form since I got an error message when just using my record locator. This was for a US-Canada non-refundable round-trip in April 2020, booked in October 2019. The refund was processed to my credit card yesterday - much faster than stated (and certainly faster than expected).

  6. Laura

    What about the other airlines, we booked Air Transit in Aug 2020 when things were looking good for travel in 2021. We got a voucher.
    Bailout should be for all Canadian airlines.

  7. Sara

    Had $$$$ tied up in airfare with AC from last year booked via Expedia. Overjoyed to read this on your page yesterday and sprung into action. I was on hold with Expedia for 2 hours this morning but finally got through to a human who relayed that the AC refund options were updated on the Expedia system within the last 12 hours to reflect this news and he put through our refund. Did tell me...

    Had $$$$ tied up in airfare with AC from last year booked via Expedia. Overjoyed to read this on your page yesterday and sprung into action. I was on hold with Expedia for 2 hours this morning but finally got through to a human who relayed that the AC refund options were updated on the Expedia system within the last 12 hours to reflect this news and he put through our refund. Did tell me it could take up to 12 weeks to appear on the CC but it's a great victory and we'll take that in this day & age!

  8. The nice Paul

    Isn’t the real story something like:

    “Thieves who were caught red-handed eventually agree to return some of the money they stole. There is a mass outbreak of celebrations, and the thieves are congratulated by many for finally doing the right thing by some of their victims.”

    Personally I’d rather the over-extended airline had been allowed to go bankrupt so that passengers could reclaim their cash from the Administrators and their credit card companies / insurers.

    ...

    Isn’t the real story something like:

    “Thieves who were caught red-handed eventually agree to return some of the money they stole. There is a mass outbreak of celebrations, and the thieves are congratulated by many for finally doing the right thing by some of their victims.”

    Personally I’d rather the over-extended airline had been allowed to go bankrupt so that passengers could reclaim their cash from the Administrators and their credit card companies / insurers.

    That’s what’s meant to happen in capitalism. Though, as usual, most people seem to think socialism is great for companies but evil if used to support individuals.

  9. PeterM

    Great news and both my credits are now in transit to the original payment form. Amex said allow 12 weeks. That booking included my annual $400 Amex travel credit which 'm assured will then be valid for another 12 months.

  10. Stuart

    Good for Canada. They did it the right way. Claiming an equity stake that should have been done here. It worked well for the auto bailout in 2009 and I have no idea why the Govt did not do the same in relation to the airlines this time. Basically we just handed them taxpayer cash for nothing in return.

  11. INS Vikrant

    How did it take a year for Canada to get it together? Perhaps Trudeau was struggling to wipe his face clean for a public appearance.

    So much for the USA being backwards and whatnot compared to Canada. How’s that vaccine drive going Trudeau?

    Seriously, Canada is inept and can’t govern itself. This country that’s only existed since 1982 should just let the USA take over.

  12. Lara

    Now if only Alitalia would follow. They are holding on to my clients airfare and said they have to rebook a trip to Italy by August or the credit expires. They absolutely will not refund.. well they will, but the penalty is very steep - over half the cost of each ticket.

  13. AD

    Called Expedia to check on this but the agent said that they are trying to reach Air Canada for further guidance on how to handle this but they weren't able to get any feedback from them. He suggested that I call back in 72 hours when they will know more about it.

  14. Beth

    Glory! Been fighting for this for a year!

  15. Yeet

    Called Chase to refund a cancelled AC trip. After about an hour long call the rep was able to put in the request on AC's site - claim says it may take up to 10 weeks (!) to process. I imagine I'll be making another call then to actually get the UR back.

  16. echino

    Clicked request refund, got this:

    "We can't seem to find your booking based on the information provided."

    Tried again, got this:

    "It seems your flight was cancelled outside of the COVID-19 goodwill period (tickets purchased before April 13, 2021 with a travel date on or after February 1, 2020)."

    Which is false. My tickets were purchased before April 13, 2021 with a travel date after February 1, 2020.

    So the refunds are not actually working.

  17. HP

    Can't find reservation online! Phone line says it has reached full capacity! Air Canada at it again :) good luck with the "great" news :)

  18. Mark G.

    OMG, this is amazing. I was not looking forward to booking summer flights with that stupid coupon. Best news this week!!

  19. rich

    People need to be careful making reservations for trips going forward. The odds of getting a trip canceled, or getting stuck in some country due to a lock down is going to be high for the foreseeable future.

    Even if you are vaccinated, or don't worry about the virus, you are at the mercy of whatever airlines, and countries you visit.

  20. George

    Reputation damage is already done. AC will probably have to offer strong incentives (e.g. cheap prices) for people to be willing to risk having their money tied up like that again. I believe this will be especially true for international traveling.

  21. Alamrin Semog

    Air Canada should NOT have been bailed out by taxpayers. They took in money and didn't provide the service. Return the money...simple!!! Now they're giving refunds which is literally the passenger paying himself the refund. Air Canada should have dug out the refund monies from their profits...

  22. Tom

    Despite being a loyal AC customer, with several trips taken in the past year and several more booked, this is bad news, being a Canadian tax payer. This is tax-funded government interference in a sector that already lacks competition in Canada, which never works well in the long term, no matter how the short term metrics are spun.

  23. Bob

    So Canadian taxpayers paying refunds to Americans who bought cheap transit tickets on our disgrace of an airline.

    At least the CEO still gets his millions. Was getting worried he wouldn't...

  24. Gene

    @ Ben -- Wow. I just requested to have our points turned back into a credit card refund. The process appears to be automated, as Air Canada anticipated such requests. Hopefully the return of the money will go smoothly.

    It is amazing what they can do when it is in their interest. WE WILL NEVER FLY AIR CANADA, except of course in the event of an error fare. What a horrible company.

  25. Scudder

    Sounds like the Canadian tax payers are getting a better deal here than we did bailing out the US airlines.

  26. Warren

    "Air Canada customers who booked a flight on or before March 22, 2020, for travel after February 1, 2020, will be eligible for refunds as soon as April 30.

    The refunds will also apply to those who purchased tickets after March 22 that were subsequently cancelled by the airline."

    Looks like not only will AC be refunding passengers affected by INVOLUNTARY cancellations, they will now also be refunding VOLUNTARY cancellations as well (for those who...

    "Air Canada customers who booked a flight on or before March 22, 2020, for travel after February 1, 2020, will be eligible for refunds as soon as April 30.

    The refunds will also apply to those who purchased tickets after March 22 that were subsequently cancelled by the airline."

    Looks like not only will AC be refunding passengers affected by INVOLUNTARY cancellations, they will now also be refunding VOLUNTARY cancellations as well (for those who cancelled when Trudeau asked people to stop travelling or to come back to Canada). This is going a step above/beyond the US and also the EU carriers since neither US or EU carriers will refund VOLUNTARY cancellations on non-refundable fares.

  27. Steve_CC

    Still waiting on westjet, they know americans cant go to Canada and will only offer credit valid through summer knowing US citizens cant use said credit and it will expire.

  28. JAMES BARRY

    Quebec company, Quebec airplane manufacturing facility, jobs subsidized in what will almost certainly be an election year.
    Who could have guessed?

  29. David

    Ben, Air Canada was not in a position where they “literally couldn’t pay the refunds”: https://www.bnnbloomberg.ca/air-canada-doesn-t-want-colossal-failure-of-government-ownership-ceo-says-1.1524424

    The CEO was quite clear that Air Canada had “decent” liquidity levels for refunds (they could afford to do it), but they rather not because there is no incentive to do so. They won’t mind returning the money though, as long as the government is willing to pay them.

  30. Jonas

    oh for tickets ticketed in Europe and starting in the EU Air Canada gave refunds all the time if they cancelt a flight... got my money always in 3 days back.

  31. Gene

    @ Ben -- How do I return the miles they gave me for cash?

  32. rtbones

    ...including both repayable loads that...

    I believe you mean "...repayable LOANS..."

    1. Ben

      @ rtbones -- Oh my, oops. Fixed.

  33. PM1

    Finally!!! I don't have a huge amount stuck like some of the others but this has been an irritant for a year.

Featured Comments Load all 35 comments Most helpful comments ( as chosen by the OMAAT community ).

The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

Heera

I have booked a family trip to S. Korea to fly with Air Canada but used Expedia for booking. Almost $6K was paid. After many calls to Expedia and Air Canada for over a year, was happy to hear that AC will finally refunding the money. However, the battle to get through Expedia has been a nightmare with over 2 hours of wait time, and while waiting the call would hang up. I would call AC and they would just tell me I had to go through Expedia to initiate a refund. Finally last night I was able to get someone from Expedia to tell me that the refund was initiated but it would take 2 months to get the refund and it won't be 100% refund. They will refund minus the commission that was paid to Expedia. On AC website, it states they would refund the money and would not recall the commission. So do I need to ask Expedia to pay me back the commission?

Gayle

I called up Priceline this evening - was on hold for 1 minute and they processed the refund right away. Painless. Relieved. Made me cry a little - reminder of a missed family vacation w/ my kids (to St Johns!) but nice closure too.

Susan M Sundahl

Want more than anything for WestJet and JetBlue to start returning. Have close to $1,000 tied up between the two. Susan MSP

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