The Canadian Transportation Agency says airlines are not required to refund passengers for flights cancelled due to the COVID-19 pandemic or other reasons outside an airline's control.

The transportation watchdog says current rules only oblige the airline to ensure passengers can complete their trip.

Over the past month, airlines have cancelled routes and slashed capacity amid plunging travel demand triggered by the novel coronavirus, leaving thousands of Canadians stranded abroad and thousands more without a flight.

Airlines have been sending repatriation flights and offering customers vouchers — an approach the watchdog supports — but only Sunwing has a refund policy in place for cancelled routes.

Passenger rights advocate Gabor Lukacs says several decisions by the transportation agency itself appear to contravene its recent statement, with at least three rulings in the past seven years affirming air travellers' right to a refund regardless of whether a flight cancellation is beyond the airline's control.

Lukacs says the agency's position is "troubling," while the watchdog says it's aiming for a balance between passenger protection and "airlines' operational realities" as border closures prompt carriers to park planes and lay off thousands of employees.