Airline passenger refund feud reaches new heights

From City News – link to story

BY ADRIAN GHOBRIAL AND JESSICA BRUNO | MAY 22, 2020

An Air Canada flight from Mexico City arrives at Vancouver International Airport, in Richmond, B.C., on Friday, March 20, 2020. A union official says Air Canada is laying off more than 5,000 flight attendants as the country’s largest airline cuts routes and parks planes due to the coronavirus. THE CANADIAN PRESS/Darryl Dyck

One of Canada’s top courts is letting a controversial statement on airlines’ obligations to customers during COVID-19 stand, for now, despite a challenge from a passengers’ rights group.

Since mid-March, airlines and travellers have each been left scrambling as COVID-19 has all but shut down international travel.

Frustrated passengers have been trying to recoup their money from cancelled flights, while Canadian airlines have sometimes been refusing to issue cash refunds.

At that time, the Canadian Transportation Agency (CTA), who are duty-bound to act as an impartial tribunal, took the controversial step of issuing a “Statement on Vouchers” on their website.

In it, the CTA highlighted the importance of striking “a fair and sensible balance between passenger protection and airlines’ operational realities.”

It went on to say that “generally speaking, an appropriate approach in the current context could be for airlines to provide affected passengers with vouchers or credits for future travel.”

The founder of Air Passenger Rights, Gabor Lukacs argues, “the Statement is being used by airlines, travel agents, travel insurance, and credit cards, to mislead the public to believe that they are only owed vouchers and not an actual refund.”

Multiple passengers who’ve reached out to CityNews say airline and travel companies have been portraying the statement posted on the CTA’s website as a legally binding document, even though it isn’t.

Air Passenger Rights asked the Federal Court of Appeal to temporarily order the Canadian Transportation Authority to take the statement down.

In a decision released today, the court underscored that the statement isn’t legally binding, saying the CTA’s statement “simply suggests” that vouchers are an appropriate way of dealing with the situation.

But the court goes on to rule that because the statement isn’t a legal document, there aren’t grounds to force the CTA to take the statement off their website until the Court of Appeal makes a final decision.

Lukacs says he’s disappointed in the interim ruling, adding “it means that more passengers will be misled by the Statement on Vouchers. People need groceries and to pay bills – not useless vouchers.”

Earlier this month, the CTA conceded that they’ve been asked “a number of questions” about their stance.

The agency posted an update on its website writing that their “statement on vouchers, although not a binding decision, offers suggestions to airlines and passengers in the context of a once-in-a-century pandemic, global collapse of air travel, and mass cancellation of flights for reasons outside the control of airlines.”

This week, Prime Minister Justin Trudeau said airlines are in a precarious position right now. WestJet, Air Canada and Porter have cancelled hundreds of flights, suspended service and laid off thousands of employees.

“We need to … ensure that Canadians are treated fairly and our industry remains there for when our economy picks up again,” Trudeau said in his daily news conference. He also noted that the government needs to have “some very careful discussions with airlines.”

Responding to the PM’s statement, Lukacs tells CityNews “ensuring viability of the airlines is first and foremost the shareholders’ and corporate creditors’ responsibility,” adding: “Making passengers hold the bag is tantamount to socializing losses while privatizing profits. It is wrong at many levels.”

The decision notes frustrated customers can still lodge formal complaints about their treatment by airlines with the CTA. But – those who want a quick decision are out of luck.

The court’s final ruling will determine whether the statement is permanently removed. It will also address the airline advocacy group’s argument that the Canadian Transportation Agency showed a pro-airline bias in its statement.

Air Passenger Rights alleges such a bias would taint the agency’s handling of customers’ complaints. The court has so far ruled that it’s not been proven that members of the CTA’s complaints ruling team are biased, on the basis of one unsigned statement.

Complaint decisions and passenger protections suspended

In another statement on its website, the CTA said that it has “temporarily paused all dispute resolution activities involving air carriers” to let airlines “focus on immediate and urgent operational demands.” The pause in rulings is in place until June 30, though the agency says that could be extended.

The agency has also suspended some of their recently released air passengers’ rights until the end of June.

Until then, the loosened provisions mean airlines don’t have to pay compensation to passengers whose flights are cancelled with more than 72 hours’ notice, or delayed for less than six hours.

Airline refund policies

Air Canada said it has refunded nearly $1 billion to customers since Jan. 1, largely to travellers who paid for refundable tickets.

The airline is revising its cancellation policy amid mounting customer frustration, offering travellers the option of a voucher with no expiration date or discount Aeroplan points if the airline cancels their flight due to the COVID-19 pandemic.

The airline says the new policy – the previous one capped travel vouchers at 24 months, with no Aeroplan option — applies to non-refundable tickets issued up to the end of June, with an original travel date between March 1 and June 30.

None of Canada’s major airlines tout policies offering to return cash to passengers for the hundreds of thousands of flight cancellations since mid-March, opting instead for vouchers, typically with a timeline of two years.

With files from The Canadian Press