Air Canada (TSX:AC): Did You Claim a Ticket Refund for Cancelled Fights?

Air Canada (TSX:AC) is giving ticket refunds as part of the bailout package. Is this is a win-win for travelers, the airline, and investors? 

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Did you hear? Air Canada (TSX:AC) is giving a cash refund on tickets of flights canceled between February 1, 2020, and April 13, 2021. But you have to claim the refund before June 12. And from now on, you can claim a cash refund on future flights that are canceled. Read further to know if you are eligible for the refund. 

All you need to know about Air Canada’s ticket refund 

If you bought an AC ticket for travel dates on or after February 1, 2020, or before January 26, 2020, you can claim a cash refund. Now, the airline has already given cash refunds to those who purchased refundable tickets, or so it claims. But the new refunds that I am talking about are sponsored by the government’s $1.4 billion unsecured loans. For you, it means a cash refund at all costs for travel dates from February 1, 2020, to April 13, 2021.

You can claim a cash refund

  • Even if you bought the nonrefundable tickets for the above travel dates;
  • If you accepted a travel voucher or Aeroplan points instead of a cash refund (you can exchange it for a cash refund); or
  • For tickets of flights that were canceled either by Air Canada or the traveler because of the pandemic. 

Note that you can only claim your AC ticket refund for the above travel dates before June 12. For any refund requests AC receives after this date, it will give you a travel voucher or Aeroplan points with a 65% bonus.

Air Canada revises booking policies

The above rules are for the canceled flights before the bailout. From April 13 onward, AC has revised its booking policies for all future travel. 

You can get a cash refund if Air Canada cancels or reschedules a flight by more than three hours. This means if your flight was scheduled to depart at 10:00 AM, but for some reason, the rescheduled flight timing is 2:00 PM, you can cancel your flight and claim the cash refund. This refund will depend on the fare type you purchased. If you cancel your booking within 24 hours of buying the ticket, AC will cancel the payment transaction. 

If you want, instead of a cash refund, you can accept travel vouchers or Aeroplan Points with a 65% bonus. The new policies will instill confidence among travelers to book tickets again without fearing losing their money. The refund will help AC fill the seats and reduce its losses from flying an empty plane. 

It will take more than flight refunds to fill the seats 

Refunds alone will not help. Currently, the Canadian government has mandated all international travelers to show a negative COVID-19 test result to board a flight to Canada. Despite this, some AC flights had COVID-19 positive passengers. And it only takes one infected person to spread the virus.

Hence, there are hotel quarantine rules, even for domestic travelers. As a traveler, you have to bear the hotel expense, which makes travel expensive. The tests and quarantine requirements continue to discourage people from flying until it is essential and worth all the effort. 

When will air travel restrictions ease? 

Now, the only thing everyone is waiting for is the ease of air travel restrictions. For that to happen, Canada and major nations have to control the coronavirus spread. There are only two ways to control the pandemic: 

  • social distancing and travel restrictions, and 
  • global vaccination drive to create herd immunity.

Vaccinating the global population is a Herculean task. While Prime Minister Justin Trudeau strives to make the vaccine available to all Canadians by September, it is up to Canadians to take it. And this vaccination drive has to be completed before the virus mutates to a level where it is immune to the vaccine. While the virus is mutating, so is the vaccine. Scientists are working to improve the vaccine’s ability to fight the virus. 

For now, you can only hope that international skies open for non-essential travel without quarantine requirements by the end of 2022, provided the vaccine works. When it does open, Air Canada could see a wave of leisure travel from the pent-up demand. Until then, AC stock would continue to hover between $20 and $30. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Puja Tayal has no position in any of the stocks mentioned.

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