OTTAWA —
Rob Przybylski and Courtney Ross were slated to wrap up the month on a Costa Rican beach, sipping sugarcane cocktails with friends and family as they celebrated their wedding.
Instead, the Oshawa, Ont., duo say they and their 84 guests are out more than $216,000 after their Sunwing Airlines vacation package was cancelled due to the COVID-19 pandemic.
“They have basically told us that refunds are not an option,” said Przybylski, 35.
Like most Canadian airlines, Sunwing does not reimburse passengers for flights cancelled by the airline, instead offering travel vouchers valid for two years.
The couple’s original booking in April had been called off by the carrier as the virus shut down global air travel. Their destination, a Planet Hollywood resort on the Pacific Ocean, offered a refund, but Sunwing did not, he said. So they rebooked the nuptial getaway for Nov. 27.
Sunwing cancelled the second flight last month, he said.
“We have 80 people that are out money, and a lot of them aren’t working now,” including his fiancee for much of this year, Przybylski said.
“My mom is the perfect example. She hasn’t travelled in 30 years. What is she going to do with a credit?”
Despite minuscule travel demand, Canadian airlines continue to schedule tens of thousands of flights per month, only to cancel the vast majority of them several weeks before takeoff.
The approach can leave passengers with a drastically changed itinerary or no flight at all, giving them little choice but to accept vouchers they may never use.
Air Canada cut more than 27,000 flights, or 70 per cent, from its November schedule between Sept. 25 and Oct. 9, according to figures from aviation data firm Cirium. It cut another 2,000 by the end of October.
WestJet, which recently began to offer refunds for cancelled flights, in contrast to its competitors, slashed its November schedule by about 12,400 flights, or 68 per cent, in one week last month. Air Transat scrapped 63 per cent of its flights for November in the same week, leaving it with 123 – down to 100 as of last week.
Comparable schedule cuts occurred in October and September.
“It’s called bait and switch,” said John Gradek, a lecturer at McGill University and head of its Global Aviation Leadership program.
The strategy is a response to a shift in customer behaviour, an attempt to woo wary travellers with ample flight options before drastically undersold seats prompt a scheduling cull.
“The industry cross their fingers and hope people buy, that they all of a sudden get this insane urge to fly,” Gradek said, calling the practice “deceptive.”
“’Cynical’ is probably too light of a word,” he said. “It borders on the edge of misleading advertising, that you’re promoting and offering for sale stuff that you know there’s a high probability will not be what you’re actually offering to the customer.”
Carriers deny there is anything untoward about recent schedule gutting.
“Airline schedules have always been subject to change,” Air Canada spokesman Peter Fitzpatrick said in an email, noting the company has had to cut capacity by more than 90 per cent since March.
“Overall, our schedule continues to operate as planned, and for any customers affected by changes we do provide advance notice and offer options.”
“We do our best to avoid cancelling flights at the last minute,” said Transat spokesman Christophe Hennebelle.
Sunwing and WestJet did not respond immediately to questions.
Transport Minister Marc Garneau called the situation “complicated,” saying he sympathizes with customers.
“I encourage the airlines to repay passengers if they can. At the same time, some of those airlines are in deep difficulty in terms of their own ability to continue to function if they were having to provide refunds to all of the customers.”
Air Canada held on to more than $2.4 billion in advance ticket sales as of July 31, a hefty sum to return after its revenues dropped 95 per cent year over year in its second quarter.
Travellers have a right to reimbursement for a service that was paid for but never rendered, regardless of airlines’ financial woes, say opposition MPs and consumer advocates.
The Conservatives, NDP and Bloc Quebecois have demanded refund requirements as a condition of any aid package to the industry.
Bloc Leader Yves-Francois Blanchet said Friday the government is “behaving like a branch of Air Canada.”
“The minister of transport for seven months, since the beginning of the crisis, has essentially shrugged his shoulders any time the need for passenger reimbursement has come up,” NDP transport critic Niki Ashton said in an interview.
The Canadian Transportation Agency said in March that airlines can issue travel credit instead of refunds for cancelled trips in the “current context,” though the agency later clarified that the online statement was “not a binding decision” and that reimbursements depend in part on the contract between airline and passenger.
European and U.S. authorities have demanded airlines reimburse travellers, on top of the strings attached to aid that range from limiting dividends and executive bonuses to cutting carbon emissions and carving out ownership stakes for government.
Back in Oshawa, far from the sands of a Costa Rican resort, Rob Przybylski took stock.
“I know I’m not the only one in this situation. The biggest thing for me is to get my money back for my guests.”
This report by The Canadian Press was first published Nov. 6, 2020
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
