Feds, Consumer Advocates Face Off in Court Over Air Passenger Refunds

The federal government and a consumer rights advocate clashed in court Wednesday over whether regulators misled passengers encouraging travel credit instead of refunds at the start of the pandemic.

In the early months of the spread of COVID-19, airlines canceled hundreds of thousands of flights and offered corporate vouchers to customers instead of refunds.

The Canadian Transportation Agency issued a statement on vouchers in March 2020 in which such flight credit was a “reasonable approach” to passengers left out of pocket due to canceled trips. The publication suggested that the refund was mandatory only if the contract between the customer and the airline contemplated it.

The air Passenger The rights group argues that the regulator showed potential bias by misinforming travelers about their legal right to a refund for services not provided.

“By giving the public a false sense of legitimacy of the airlines’ illegal actions, the CTA’s statement on vouchers defeated existing federal refund laws and illegally interfered with passenger“Credit card chargebacks and travel insurance claims,” ​​the group stated in court documents.

The government argued that the case should be dismissed, saying the CTA’s statement simply reiterated that the vouchers were a means of compensation. He said the advocacy group incorrectly framed the guidance as tainted.

“The CTA, faced with an unprecedented global situation, issued the statement as non-binding guidance. The statement does not represent any decision of the CTA” – and therefore never violated consumer rights – the attorney general wrote in court documents.

Air Passenger Human rights lawyer Simon Lin argued that the CTA’s statement on the vouchers was prompted by a request from Air Transat to the Department of Transportation.

The group asked the Federal Court of Appeals to order the retraction of the receipt, along with a rectification.

He also asked the judicial panel to prevent the agency’s court members from handling pandemic-related reimbursement cases.

In court Wednesday, the judges appeared to cast doubt on parts of Air Passenger Rights’ argument, repeatedly asking for examples of agency decisions that denied reimbursements to passengers on the basis of the CTA voucher statement. They also questioned whether the regulator’s statement came at the behest of the airlines.

“Even if we accept its premise, it still has to be shown that it affects legal rights,” said Supreme Court President Yves de Montigny.

The relationship between Canada’s airline watchdog and the travel industry came under new scrutiny in 2021 after emails from the early days of the pandemic were released. In those emails, airline industry executives pressured public officials to back their position against the issuance. passenger refunds, days before the regulator did just that.

Three days after a letter from Transat’s CEO at the time requesting confirmation that “there are no refunds to passengers are necessary,” the CTA released its statement, saying that airlines were generally able to issue flight credits or vouchers to customers whose flights had been canceled due to the pandemic, rather than refunding them.

The Association of Canadian Travel Agencies also wrote to the regulator asking for help with “preventing credit card chargebacks.”

The CTA’s March 25, 2020 statement sparked a public backlash and thousands of complaints to the transportation agency.

Several airlines accepted the refund more than a year later as a condition of Ottawa’s aid packages starting in April 2021.

An update of the passenger The 2022 bill of rights required carriers to reimburse customers in force majeure situations, such as a pandemic.

This report by The Canadian Press was first published April 17, 2024.