The head of Canada’s second-largest airline is welcoming a regulator’s interpretation that his airline does not have to refund money to people whose travel plans have been cancelled by COVID-19.
Westjet, along with subsidiary Swoop, Air Canada, Transat, and others are facing potential class action lawsuits from angry passengers who are demanding the airlines refund their money after their flights were cancelled. Instead, airlines have generally adopted policies giving passengers travel credits to be used against future flights.
“We value the feedback we are receiving from our guests and appreciate how difficult this unprecedented situation is for all Canadians and for all countries globally,” said Westjet President and Chief Executive Officer Ed Sims in a statement Monday. “We are pleased that the Canadian Transportation Agency has deemed refunding to a travel credit as an appropriate measure at this time.”
The CTA regulates airlines in Canada.
Early in the pandemic, the agency suspended some provisions of the Passenger Bill of Rights requiring airlines to compensate passengers for a number of reasons including delays, if those disruptions could be attributed to COVID-19.
Now it has gone further, stating there’s no regulatory requirement for airlines to refund money to passengers whose travel plans have been grounded by the pandemic.
“This positive response allows airlines operating in Canada to focus our efforts on managing our business through this crisis so that we can hasten our return to service and fulfill the travel obligations we have for the more than 25 million guests who fly with us each year,” said Sims.
The CTA’s reasoning goes squarely against the practice in the United States, where the regulator has warned airlines to refund money to passengers, much as they did in the aftermath of the 9/11 terror attacks.
Airlines are hemorrhaging money as passengers heed border closures and government orders to stay home.
Larger rival Air Canada plans only 734 domestic departures this week, plus a handful of flights to the United States and overseas. Air Canada has laid off more than 16,500 employees and managers to conserve cash.
The CTA said a number of Canadian carriers have clauses in their tariffs – the legal terms under which tickets are sold – that don’t require them to refund tickets in cases of force majeure, such as a pandemic that causes widespread disruption to air services.
Lawsuits in the Quebec and Federal Courts are seeking to be certified as class actions, arguing passengers should get their money back if they are forced to cancel their plans through no fault of their own.
Editor’s note: A previous version of this story read that the CTA had decided there is no regulatory requirement for a refund. It was, in fact, an opinion issued by the regulator, who said it would review any complaint on a case-by-case basis.