Health Committee on June 22nd, 2020

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you, Mr. Chair.

My questions are for Air Canada to begin with.

Conservatives were pushing for border closure early on for high-risk areas. What influenced Air Canada's decision to start stopping flights as early as January, going against the Canadian government and the WHO's recommendations?

[Ferio Pugliese]

With respect to January, I would say any decisions that were made early on in the year were largely commercial in nature. I would say the more pointed changes that we experienced would have come in late April and into early May, where we saw the border constraints continuing to be extended, and as a result, we suspended our service because traffic had been down significantly. Canadians are able to fly into the United States, but U.S. passengers are not able to come into Canada, and when they return, both of those are subject to a 14-day quarantine. That had a hugely significant down-draft effect on passenger demand.

When you look at the early part of the year, many of those decisions on the network, if any, would have been commercially related. Later into the second quarter, they were largely COVID-related as a result of border restrictions being imposed.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

You'd agree with me then that, if the Government of Canada had closed the borders at the same time that you stopped taking flights across the border, it would have essentially had a more significant impact on the number of COVID-19 cases. Also, in terms of your competitors, it would have encouraged them to also shut down their flights from other high-risk areas.

[Ferio Pugliese]

No, I'm not sure you can conclude that. I wouldn't say that at all. You're drawing a parallel between the traffic going back and forth and—if I'm understanding you correctly—the rate of transmission between the two countries. I don't know if you can draw a parallel to that.

I would just say that the rationale for our cancelling that service certainly had to do with the imposition of border restrictions and travel restrictions.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

It's unfathomable to me that if someone paid for a service but didn't use it, they would still be charged for that service.

Air Canada, WestJet, Air Transat, when will you be reimbursing your customers? We'll start with you, Mr. Liebman.

[Howard Liebman]

Thanks for the question.

That was also a question asked of our CEO at our quarterly results announcement last week. I want to say there are a couple of models out there. There's the model of the taxpayer paying or the model of the user paying. So far in Canada we have not followed the EU or the U.S. model, which has pumped tens of billions of dollars into airlines. We are where we are.

I want to say at the outset that we do need help in this regard. We're not operating. There's no business or industry that can go for three months with no revenue, no operation, and meet all of its obligations. I want to say that, in the end, there's a great sensitivity to the fact that we need our clients. We live and die by our clients and if we have gotten this far, it shows how grave the situation is for us and for our industry and that help is needed.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

No one else is quick to jump in.

This goes to Air Canada, WestJet and Air Transat.

Can Air Canada or WestJet...?

[Jared Mikoch-Gerke]

Mr. Chair, I thank the member for the question.

Again, as I said earlier, we really do appreciate how difficult this unprecedented situation is for all. We've taken measures to ensure that we're extending our vouchers beyond expiry. Again, the Canadian Transportation Agency, when it clarified its statement on vouchers, noted that airline tariffs do not always provide for cash refunds, especially in cases beyond our control. We do believe—

[Luc Desilets, Bloc, Rivière-des-Mille-Îles, QC]

Mr. Chair, I have a point of order. There is no interpretation into French at the moment.

[The Chair, Liberal, Ron McKinnon]

Thank you. I'll pause your time, Mr. Jeneroux.

Monsieur Mikoch-Gerke, which channel are you on? Are you on the English channel?

[Jared Mikoch-Gerke]

I am.

[The Chair, Liberal, Ron McKinnon]

Okay. Perhaps you can try that again and we can see if the translation is working.

[Jared Mikoch-Gerke]

Certainly. I was just reiterating that the—

[Luc Desilets, Bloc, Rivière-des-Mille-Îles, QC]

We can hear you loud and clear now.

[The Chair, Liberal, Ron McKinnon]

Thank you.

Mr. Mikoch-Gerke, please restate your response, if you could.

[Jared Mikoch-Gerke]

Certainly.

I'll just reclarify that on April 22, the Canadian Transportation Agency did clarify its statement on vouchers, noting that airline tariffs do not always provide for cash refunds, especially in cases beyond our control. We do believe that refunding with travel credits is an appropriate and responsible approach in extraordinary circumstances such as this.

[The Chair, Liberal, Ron McKinnon]

Thank you.

Mr. Jeneroux, you have 10 seconds left. Did you want to ask the third airline for a response?

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

You read my mind, Mr. Chair.

[The Chair, Liberal, Ron McKinnon]

Is there anyone who can respond from the other airline?

[Ferio Pugliese]

Yes, I would just echo my colleagues' responses. Air Canada has complied with the applicable regulations as of April 22 and the CTA statements. I'll also reiterate that for refundable tickets, we issued payment on those as per the tariffs and the regulations to the tune of $1 billion.

[The Chair, Liberal, Ron McKinnon]

Thank you all.

Thank you, Mr. Jeneroux.

We'll go now to Ms. Sidhu.

Ms. Sidhu, you have five minutes. Go ahead, please.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you, Mr. Chair.

Thank you to all the witnesses from the Canadian airline industry. You brought thousands of Canadians home and delivered PPE on cargo flights to Canada during the crisis. I commend your efforts.

The airline industry is interconnected with many other industries. One of them is airport taxis and limo services. In my riding of Brampton South, there are many Pearson Airport taxis, limo drivers and companies such as Aerofleet, AirFlight and Airline Limousine taxi operators who live in my riding. Our front-line taxi drivers were working very hard due to COVID-19 during the health crisis, including some who tragically passed away due to the virus. We know what they and their families are going through, and I know more can be done for them.

My question is to all the witnesses. How are airline companies such as yourselves coordinating with these companies to put in support measures for them as you begin to increase the volume of your services? This question is for all, and we can start with Air Canada.

[Ferio Pugliese]

Thank you very much to the member for the question.

We really understand the impact on the tertiary businesses. We just recently started a tourism round table, which consists of well over 45 members from the tourism/travel/visitor economy, of which other forms of transportation are a part. In that, our goal is to work collectively on how we will support continuous measures among all of these businesses, because when you look at the impact to the economy overall, these businesses, combined with our businesses here around the table, equate to $106 billion of economic output to Canada. It's not insignificant, but everybody has to be in lockstep with these measures.

As we start working, we're working with Transport Canada on our own measures within airports and in air transportation within the aircraft itself. We are also working with our counterparts within industry to look at how we support consistent measures, and if those are measures like PPE, sanitation and so on, these are things that we will be partnering with them on.

[Sonia Sidhu, Liberal, Brampton South, ON]

Does any other person want to respond? Okay.

My next question is this. I understand there's limited space in airports, for example, as reflected in lineups for boarding and to retrieve luggage, which may be a complicating factor in resuming normal air operations, especially in countries that may not have similar regulations to what we do in Canada. Can you elaborate on this issue? How is your company working around this in Canada?

[Dr. Jim Chung]

Maybe I'll take that question.

We recognize that there are multiple points throughout the travel journey, not only here but internationally, where there may be periods when one is unable to maintain social distancing. That's why there's a multi-layered approach to—