Air Canada still won't refund canceled US flights despite new rebooking options

In light of the coronavirus pandemic, almost all major airlines have added flexible waivers for those looking to change or cancel upcoming travel plans.

We've also seen some carriers get creative and offer more options than just waiving the change fee. The most well-known such policy is perhaps Qatar's "Travel with Confidence" promotion. Stateside, Southwest is adding the ability to convert travel funds into Rapid Rewards points.

And now, Air Canada — which just resumed U.S. flights — is out with its latest offer. Noticeably absent, however, is the ability to get refunds for flights the carrier cancels, even if the flight is to or from the United States.

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Air Canada's new rebooking options

As part of Air Canada's new goodwill policy, customers with tickets purchased before June 30, 2020 for travel from March 1, 2020 to June 30, 2021 can choose from one of the following three options:

• Make a one-time change without a change fee
• Cancel your flight for a flexible travel voucher
• Convert the value of your ticket into Aeroplan miles with a 65% bonus

The latter two choices will be new as of June 1, but apply retroactively to all tickets that fit in the validity period. The travel voucher is one of the most flexible we've seen, as it never expires, is fully transferable and can be used to cover multiple transactions.

The option to convert the value of the ticket to Aeroplan miles might seem like a good deal, but there are some caveats. For one, you can only apply the value of your ticket less taxes to an Aeroplan conversion. Though the carrier offers an additional 65% bonus miles, the cost to acquire miles through this process is about 1.3 cents per mile in USD (in line with its most recent mileage sale).

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TPG values Aeroplan miles at 1.5 cents per mile, so it could make sense to convert your voucher into miles, but note that Aeroplan miles expire after 12 months from the last activity.

Air Canada refuses to refund U.S. flights

On its updated webpage with cancellation options, the Montreal-based carrier states that if your flight is canceled for reasons outside of its control, you are only entitled to one of the three aforementioned rebooking options.

There's a specific call-out claiming that the carrier isn't responsible for refunding flights it cancels.

If you purchased a non-refundable fare, please note that in accordance with government regulations, non-refundable bookings that are cancelled due to the impacts of COVID-19, government travel advisories and/or health and safety concerns are outside of Air Canada's control and ineligible for a refund.

If you're followed my advice since the outset of the coronavirus outbreak, you'd know that you're entitled to a refund for a canceled flight if your flight is to, from or within the United States. That's due to the Department of Transporation's policy that's recently been reinforced through multiple memos to airlines. (Note this only applies to flights canceled by the airline).

Related: Why you should wait until the last minute to get a refund for your flight

Naturally, you'd think that Air Canada would allow refunds for its transborder U.S. flights. Well, you're wrong. In response to a reader's customer-care complaint, the carrier states:

Our policy is consistent with the Canadian Transportation Agency, which recently confirmed in a statement regarding COVID-19, the appropriateness of offering the remaining value of the ticket for future travel due to this unprecedented situation...

We realize you may disagree and view this approach as inconsistent with the US DOT's Enforcement Notice. However, we believe that our position is consistent with US law having examined this question in depth.

Indeed the carrier is abiding by the Canadian Transportation Agency (CTA) which recently backtracked on refund requirements for canceled flights. However, that doesn't mean Air Canada can just ignore the DOT's policy of being entitled to a refund for a canceled U.S. flight. Since all flights to or from the U.S. are subject to DOT rules, you should indeed get your money back.

How to get a refund for a canceled Air Canada flight

Just because Air Canada refuses to budge for canceled transborder U.S. flights, doesn't mean you can't get a refund. It's just going to be a bit harder.

Related: How to refund a nonrefundable airline ticket

After the airline denies a refund request for a canceled flight, you should reach out to your credit card company to dispute the charge.

Additionally, you should also file a consumer complaint with the DOT. This will help alert the agency to the violations. If the DOT notices a large number of complaints, it may lead to enforcement action against the carrier after the DOT conducts a review. Plus, the airline needs to formally respond to passengers filing DOT complaints, so you'll be guaranteed to get a response this way from a well-qualified customer service agent.

Bottom line

Air Canada's introduced some creative and generous rebooking options, but it falls short of giving refunds for canceled U.S. flights.

This directly contradicts the latest enforcement notice from the Department of Transporation, so be sure to file a complaint and consider a chargeback should you not receive the money you deserve.