General aviation

U.S. carriers must refund passengers for COVID cancellations

An Air Transat Airbus A330 departs Vancouver International Airport. Transat is one of the carriers facing a class action lawsuit as a result of COVID-19 policies (photo: Brett Ballah).

The United States Department of Transportation has told carriers they must refund passengers when flights are cancelled or significantly delayed south of the border. The order applies to Canadian carriers operating in the U.S.

“Carriers have a longstanding obligation to provide a prompt refund to a ticketed passenger when the carrier cancels the passenger’s flight or makes a significant change in the flight schedule and the passenger chooses not to accept the alternative offered by the carrier,” the DOT said in an enforcement note published Friday.

In many cases in Canada, airlines are offering travel credits to passengers affected by COVID cancellations.

The USDOT noted carriers have a long history of providing refunds, including after the 9/11 terrorist attacks which forced carriers to ground thousands of flights.

“Although the COVID-19 public health emergency has had an unprecedented impact on air travel, the airlines’ obligation to refund passengers for cancelled or significantly delayed flights remains unchanged,” the agency said.

In Canada, major airlines are facing class action lawsuits from passengers whose flights were cancelled due to the COVID-19 pandemic. Airlines responded to closed borders by grounding their planes, laying off staff, and significantly reducing their flying schedules.

Air Canada, Transat, Westjet, Sunwing, and Swoop are being sued by passengers who were notified their cancelled flights would be held as an airline credit, some only until the end of the year.

“I too bought tickets for me and my two daughters to go to Mexico on April 7/20,” wrote Cheryl Bouges in a comment to Western Aviation News. “I asked for a refund and was told I had until Dec/20 to use our tickets. I blew a gasket over this and I wouldn’t cancel the tickets. I was told I had until three days before we left to cancel. Well I want a refund as this trip wasn’t cheap over $5000.00 so count me in as Air Canada should refund us.”

The Canadian regulator – the Canadian Transportation Agency – has not issued a similar requirement, leaving the courts as the only recourse for upset passengers.

“For flight disruptions that are outside an airline’s control,” said the agency in a statement, “the Canada Transportation Act and Air Passenger Protection Regulations only require that the airline ensure passengers can complete their itineraries. Some airlines’ tariffs provide for refunds in certain cases, but may have clauses that airlines believe relieve them of such obligations in force majeure situations.”

The CTA has exempted Canadian carriers from provisions of the Passenger Bill of Rights that required compensation for delays under the airline’s control.

It said in mid-March that “flight disruptions to locations that are covered by a government advisory against travel or unnecessary travel due to COVID-19,” would be considered outside the airline’s control, and therefore not eligible for compensation under the regulations.

“On the one hand, passengers who have no prospect of completing their planned itineraries with an airline’s assistance should not simply be out-of-pocket for the cost of cancelled flights. On the other hand, airlines facing huge drops in passenger volumes and revenues should not be expected to take steps that could threaten their economic viability.”

The U.S. DOT sees the situation differently, focusing not on regulatory requirements, but rather on the airline signing on to a contract to get the passenger where they wanted to go.

“The focus is not on whether the flight disruptions are within or outside the carrier’s control, but rather on the fact that the cancellation is through no fault of the passenger,” said the DOT.

Airlines argue the pandemic is an unforeseeable circumstance that prevents them from fulfilling their end of the deal.

“We have taken extraordinary measures in those extraordinary force majeure circumstances, by allowing our clients to get a credit they can use for 24 months,” said Air Transat’s Vice President Christophe Hennebelle in an e-mail responding to the class action lawsuit. Transat is one of the airlines offering a travel credit instead of refunds.

“We are confident that they will be able to travel again in a not-too-remote future, once the crisis is over.”

None of the allegations has been tested in court, and airlines have not yet filed statements of defence in the proposed class action lawsuits.