Canadian Prime Minister To Review Travel Vouchers As Refunds

Canada’s Prime Minister is finally commenting on a topic that many Canadian’s have been extremely vocal about since…

Canadian Prime Minister To Review Travel Vouchers As Refunds

Canada’s Prime Minister is finally commenting on a topic that many Canadian’s have been extremely vocal about since the COVID-19 pandemic started. This morning, Justin Trudeau said that his government acknowledges that many travelers are now out of pocket for canceled flights and that discussions will be had with various stakeholders to “figure out a way forward.” His remarks come almost a week after it was discovered that Air Canada has plans to cut as many as 20,000 jobs in the coming weeks.

WestJet is Canada’s second-largest airline and, like other Canadian carriers, has been issuing vouchers in place of refunds. Photo: WestJet

The Prime Minister’s statement

The remarks were made during the PM’s Thursday morning address to the nation. During the question period, a member of the media asked the following question (translated from French):

“Recently Air Canada had about C$2.6 billion in fares sold and not refunded. Is your government going to make assistance to airlines conditional on the extent to which they refund their passengers?”

For reference, C$2.6 billion is equivalent to US$1.86 billion.

The following was Trudeau’s response to the question:

“We recognize how impacted air travel and airlines are by this COVID-19 pandemic, we also recognize that many Canadians are out of pocket for tickets that they are obviously not going to be using. We need to have some very careful discussions with airlines, with the air travel sector and wit Canadians who are concerned, to try and figure out a way forward and ensure that Canadians are treated fairly and our airline industry remains there for when our economy picks up again.”

Justin Trudeau canada pm
Canadian Prime Minister Justin Trudeau’s comments were made during a Thursday morning briefing to the country and media. Photo: Getty Images

Statement analysis

There’s certainly not much to glean from Trudeau’s response to the question. Still, this vague and unclear answer tells us that the issue of refunds is not yet off the table and that the government may still weigh in on the issue. However, in that same vein, there is no guarantee that the government will intervene and come to the rescue of out-of-pocket travelers.

One key piece of background information is the planned layoffs at the nation’s largest airline – Air Canada. With an estimated 50-60% of the airline’s employees on “the chopping block,” many are anticipating some form of government intervention similar to what has been provided to the fishing and farming sectors of Canada (though support would need to be substantially more).

Therefore, if the government is to provide financial assistance, many are demanding that conditions should be attached – including the provision that refunds are issued to travelers who request them.

Air Canada a330 interior cabin
Many of Air Canada’s flights have been going out fairly empty in the last month. Photo: Chris Loh/Simple Flying

The government must step in

According to Canadian Air Passenger Rights Advocate, Gabor Lukacs, the Trudeau Government is “abdicating its responsibilities to Canadians, and are aiding and abetting airlines to hold Canadians hostage — not only financially, but by veiled threats on the supply chain.”

He says that Under section 47 of the Canada Transportation Act, the government can and
should step in to protect critical transpiration infrastructure. With respect to airlines, he says that among other things, the government should demand full transparency on financials and that airlines price their services at fair market value. He also says that executive pay should be frozen or cut, and an independent firm should conduct an audit of major airlines.

Prestige 25K
Air Canada has plans to cut 50-60% of its workforce in the coming weeks. Photo: Air Canada

WestJet responded to our inquiry with a largely pre-written statement that we’ve posted in previous articles. This includes a reminder that as per the Canadian Transportation Agency, airline tariffs do not always provide for cash refunds especially in cases beyond airline control. As such, WestJet believes refunding with travel credits is an appropriate and responsible approach in extraordinary circumstances such as the COVID-19 crisis.

Conclusion

As stated in a previous article, there was anticipation that we would see some announcement around financial assistance to the Canadian aviation sector by the end of this week. However, with only one day left in the workweek, we may have to wait longer.

What kinds of conditions would you like to see attached to financial assistance from the government? Do you think the Canadian government will side more with airlines or consumers? Let us know your thoughts in the comments.

Simple Flying also reached out to Air Canada for a response, however, the airline has yet to respond to our inquiry.

Source : Simple Flying More   

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Former Avianca Owner Wants To Buy Alitalia

German Efromovich, the former Avianca owner, is interested in buying the troubled Alitalia. While there’s still a long…

Former Avianca Owner Wants To Buy Alitalia

German Efromovich, the former Avianca owner, is interested in buying the troubled Alitalia. While there’s still a long way to go, Efromovich has been interested in Alitalia for a while now. What does this mean for the bankrupt Italian airline? Let’s investigate further. 

Former Avianca owner, German Efromovich is interested in Alitalia. Photo: Getty Images

Who is German Efromovich?

Efromovich is a Colombian-Bolivian businessman born in 1950. He is the owner of Synergy Group, an industrial conglomerate that had the majority stake in Avianca until last year. 

In 2004, Efromovich bought Avianca, and Synergy Group acquired 75% of the South American carrier group. A year prior, , as it entered into a reorganization phase after the 9/11 air industry crisis. 

With the new administration, Avianca thrived. It positioned itself as the second most important airline in South America, right behind LATAM Airlines Group. 

During this time, Avianca extended its operations in several Latin American countries with branches in Colombia, El Salvador, Peru, Argentina, and Brazil. At some point, there was a discussion of launching Avianca Mexico, in collaboration with Mexican airline . It never happened, and the current Avianca administration no longer plans an investment like that. 

Nevertheless, in 2018, Efromovich lost control of Avianca Holdings. It happened after . Last year, United forced a takeover of the airline, and Efromovich was sacked of its airline. 

Avianca
Efromovich owned Avianca until last year. Photo: Daniel Martínez Garbuno/Simple Flying.

Why Efromovich likes Alitalia?

In 2019, when Efromovich was still in Avianca, the businessman said he was interested in acquiring 30% of Alitalia. He said,

“Alitalia is a great company. I can’t understand how it can lose money. I can put it back together in six months. Fourteen years ago, I bought Colombian carrier Avianca, when it had 34 airplanes and 4,300 employees. I’ve cured it, and now it has 189 airplanes and over 22,000 employees. The revenues went from US$350 million to US$4.5 billion.”

The businessman wants to build a new Alitalia under three pillars: aviation, maintenance, and ground services, according to 

We contacted Alitalia. At the moment of publication, we had no response. We’ll keep you updated if that changes.

We can understand the appeal of Alitalia. In theory, it has a significant market as Italy is one of the tourist hotspots in the world. The problem is that the airline can’t compete with low-cost carriers in Europe nor with long-haul operators in other continents. As a government-managed airline, it has a .  Additionally, it is bankrupt since 2017.

Alitalia
Alitalia is resuming some international operations in June. Photo: Thomas Boon/Simple Flying.

Where’s Alitalia at the moment?

As the pandemic ends in Italy, Alitalia is announcing the restart of its operations. From 2 June, the airline will operate its flights again to Spain and New York. Additionally, it expects to have a 36% increase in its number of flights compared with May, by relaunching 30 routes. 

A couple of weeks ago, the Italian Government was ready to . Previously, the airline furloughed 6,622 workers until October.

Additionally, Alitalia’s new management is analyzing its membership at the SkyTeam alliance. It is also reevaluating its route network with a strong focus on long-haul routes. But we could also see a smaller Alitalia, as the carrier could shrink its fleet from 92 aircraft to between 25 and 30 aircraft. 

While it could be tempting for the Italian Government to hear a proposal from German Efromovich, there is still a long way to go before a real deal occurs. But if it does, maybe it will mark a new era for Alitalia. 

Do you think a private investor could improve Alitalia’s operation? Let us know in the comments. 

Source : Simple Flying More   

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