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Air Canada agents are shown at Montreal-Pierre Elliott Trudeau International Airport on May 16, 2020, as the COVID-19 pandemic continues in Canada and around the world.

Graham Hughes/The Canadian Press

Amid growing pressure to refund customers’ air fares, Air Canada has broadened its travel credit policy, but is still refusing to give back cash for cancelled flights.

Canada’s largest domestic carrier on Friday said customers whose flights were cancelled because of the COVID-19 pandemic can roll the flight’s value into air miles points, plus 65 per cent, or receive a travel voucher with no expiry date. The changes are retroactive to March 1 and replace an industry-wide policy, under which a two-year voucher was the only option for customers whose travel plans were disrupted by travel restrictions.

The move does little to satisfy customer Karel Valenta, who asked Air Canada for a refund when his Vancouver-to-Chicago trip was cancelled. Instead, he was told he could get a voucher for US$750, but had to use that full amount when he rebooked – or lose the difference. He wants a cash refund, not Aeroplan Miles credits.

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“You’re basically subsidizing the airline,” Mr. Valenta said from Chicago.

“Air miles are a joke,” said Malcolm Berry, another air traveller from Nanaimo B.C., who had no problem getting refunds on his cancelled flights with Alaska Airlines and Iberia Airlines. The Canadian Transportation Agency "needs to tell them to pay refunds, but they won’t.”

Canadian airlines’ refusals to offer refunds to customers whose flights were cancelled is backed by the CTA, the federal regulator. It said passenger-protection laws and airline-refund policies did not envision the near-complete shutdown of air travel that has resulted from government-imposed border closures and flight restrictions.

“Air Canada’s policies accord with the practice of the industry in Canada, which has been reviewed and deemed acceptable by the CTA,” said Peter Fitzpatrick, an Air Canada spokesman. He declined to say how much in cancelled fares the airline had on its books. On Dec. 31, Air Canada had $2.9-billion in advance ticket sales, according to a company document.

Canada’s position differs from those of the European Union and United States, where airlines – foreign and domestic – have been told to follow the law by giving refunds. The U.S. Department of Transportation said the refund applies to airlines that operate “flights to, within, or from the United States.”

Mr. Valenta notes this law applies to his Vancouver-Chicago flight, despite Air Canada’s refusal to give him back his money.

In Europe, at least 12 European Union member states, each of which is responsible for enforcing the law, have asked the EU to withdraw its order. The countries, including Germany and Spain, said in a joint statement the rule places airlines in a “difficult situation” because they do not have the cash flow to give refunds.

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Calls for airfare refunds come as the federal government offers loans of more than $60-million to airlines and other large employers to help them survive until the economy improves.

Prime Minister Justin Trudeau hinted on Thursday the matter of refunds was not settled but did not elaborate.

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