The Canadian Transportation Agency (CTA), Canada’s regulator for aviation, has issued a statement which appearsto sanction the issuance of voucher in lieu of cash for cancelled flights.
Airlines around the globe have in under fire in recent weeks for refusing to refund customers the cash paid for their flights that were cancelled directly by the airline.
You can access the statement here.
Statement on Vouchers
The COVID-19 pandemic has caused major disruptions in domestic and international air travel.
For flight disruptions that are outside an airline’s control, 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 legislation, regulations, and tariffs were developed in anticipation of relatively localized and short-term disruptions. None contemplated the sorts of worldwide mass flight cancellations that have taken place over recent weeks as a result of the pandemic. It’s important to consider how to strike a fair and sensible balance between passenger protection and airlines’ operational realities in these extraordinary and unprecedented circumstances.
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.
While any specific situation brought before the CTA will be examined on its merits, the CTA believes 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, as long as these vouchers or credits do not expire in an unreasonably short period of time (24 months would be considered reasonable in most cases).
The CTA will continue to provide information, guidance, and services to passengers and airlines as we make our way through this challenging period.
Air Canada, Westjet and Porter have been offering passengers a credit valid for 24 months and since the CTA has issued the statement above airlines have actively referred to it as an opinion of the government that they don’t have to issue cash refunds.
This is a problematic development in multiple ways. For one, the Canadian Transportation Agency makes a statement in which it leaves the door open that this is a legally binding opinion when it in fact isn’t.
Basically this statement is nothing more than the result of some brainstorming, just an idea that CTA decided to put in writing and publish it. I wouldn’t even go as far as calling this a white paper.
It becomes a problem when a government agency is actively misleading the consumers it is mandated to protect. Not unexpected though as the CTA is pretty much known an an industry lapdog, way too comfortable with the entities it’s there to regulate.
I can remember all too well when the CTA intervened in the Swiss Air Lines mistake fare. Not only did they give Swiss a carte blanche to just cancel on everybody but they also mishandled the email database for all complainants and compromised their private data. When I complained to the privacy commissioner they acted like it’s an insult and refused to apologize for almost a year.
The CTA has in the meanwhile also stopped any dispute resolutions:
… Please note, however, that the CTA has temporarily paused all dispute resolution activities involving air carriers until June 30, 2020, to permit them to focus on immediate and urgent operational demands. While you can continue to file air passenger complaints with us and all complaints will be processed in due course, we may not be able to respond quickly. On or before June 30, 2020, the Agency will determine if the pause should end on that date or be extended to a later date. …
Apparently (from a recent Facebook post) the consumer advocacy group Air Passenger Rights Canada has sent a Cease and Desist Letter to the CTA to take down this statement from their website. Let’s see if they will do it or it this will end up in court.
I wouldn’t say it’s unreasonable to use an airline credit within 2 years but I’m not prepared to give my money to an airline on an interest free basis. They should add a very generous bonus if the refund will be done in form of a voucher, otherwise I want the cash back. To make it look like the government legally sanctions this way of doing business is wrong and the CTA should go back to being a regulator, not a lapdog.
The Canadian airlines aren’t alone here, as we reported British Airways and the Lufthansa Group have also started to only refund passengers in vouchers. At the same time some credit card companies and banks accept a chargeback request while others refuse. It pretty much depends on the jurisdiction and national laws to what a consumer is entitled to. I can see many of these cases headed to the courts to be decided by a judge or jury.