Rules and regulations

Canadian airline regulator clarifies position on COVID refunds

A Westjet Boeing 737 prepares to land at Vancouver International Airport in June 2019 (photo: Brett Ballah).

The Canadian Transportation Agency, the country’s airline regulator, says vouchers are a way to ensure competition survives in Canada’s airline industry after COVID-19 passes, despite passenger frustration over airline policies in response to the pandemic.

The CTA has issued a new post to clarify a statement on its website approving the use of vouchers for flights cancelled for reasons outside the airlines’ control.


Hundreds of passengers who have had their flights cancelled as a result of the pandemic have expressed their anger over being offered vouchers instead of refunds.

“Vouchers for future travel can help protect passengers from losing the full value of their flights, and improve the odds that over the longer term, consumer choice and diverse service offerings — including from small and medium-sized airlines — will remain in Canada’s air transportation sector,” the CTA said in a Frequently Asked Questions post on its website. “Of course, as noted in the statement, passengers can still file a complaint with the CTA.”

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Generally, the major carriers have been avoiding issuing refunds to passengers, instead offering vouchers good for travel within 24 months.

“Canada should be ashamed of itself!” said JD Rally, an elderly pensioner who booked the trip of a lifetime from Australia to Canada and the United States with his wife, said in an email to Western Aviation News. Their trip was cancelled with the pandemic.

“All the US bookings we had have already been REFUNDED in full, including air fares and boat fares,” he wrote. “NO questions asked.”

The CTA acknowledged its position was contrary to regulatory decisions issued in the United States and Europe.

“The American and European legislative frameworks set a minimum obligation for airlines to issue refunds when flights are cancelled for reasons outside their control. Canada’s doesn’t,” said the CTA. “That’s the reason for the difference in the statements.”

The CTA clarified that its initial statement was not a decision – on top of being a regulator, the agency also acts as a quasi-judicial court to decide airline complaints – but a position to help airlines and customers weather an unprecedented storm. It said passengers who aren’t happy are still welcome to file complaints, though at least two class-action lawsuits have already been launched.

“This unprecedented situation created a serious risk that passengers would simply end up out-of-pocket for the cost of cancelled flights,” said the CTA. “That risk was exacerbated by the liquidity challenges faced by airlines as passenger and flight volumes plummeted.”

That hasn’t stopped frustrated passengers from voicing their concerns.

“How about refunding your customers?” asked Wendy Hudson Friday on Twitter, responding to an Air Canada tweet about new cargo capacity.

It all comes down, said the CTA, to what each airline publishes in its tariff, the contract each passenger agrees to when they buy a ticket, even if they haven’t read it.

“If you think you are entitled to a refund and the airline refuses to provide one or offers a voucher with conditions you don’t want to accept, you can file a complaint with the CTA, which will determine if the airline complied with the terms of its tariff,” said the agency. “Each case will be decided on its merits.”

Categories: Rules and regulations

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