Coronavirus: Airlines obliged to offer credit, not refunds, watchdog says

Jacqui Birchall is hoping for a full refund from WestJet after it cancelled her flight from Puerto Vallarta to Vancouver as part of its major capacity reduction in response to the COVID-19 pandemic.

“WestJet is refusing a refund and they’re giving WestJet dollars instead … so you have to rebook with WestJet,” said Birchall, a retired teacher who spends half the year in Mexico.

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The store-credit policy, typical of Canadian airlines over the past month as border closures and plummeting travel demand prompt carriers to cancel routes en masse, has sparked frustration among travellers stranded abroad or stuck at home.

Now, a statement on the Canadian Transportation Agency website says airlines are not required to refund passengers for flights cancelled due to the novel coronavirus or other reasons outside an airline’s control.

Current rules “only require that the airline ensure passengers can complete their itineraries,” the posting from Wednesday states. “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.”

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Several decisions by the transportation agency itself appear to contravene the statement, with at least three rulings in the past seven years affirming air travellers’ right to a refund regardless of whether a flight cancellation is beyond the airline’s control, said passenger rights advocate Gabor Lukacs.

A 2014 decision affirms “the right of passengers to be refunded for the unused portions of their tickets if the carrier is unable to provide transportation on its services or on the services of other carrier(s) within a reasonable period of time.”

A 2013 ruling concerning Porter Airlines found that “it is unreasonable for Porter to refuse to refund the fare paid by a passenger because of its cancellation of a flight, even if the cause is an event beyond Porter’s control.”

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Airlines have been sending repatriation flights and offering customers vouchers — an approach the watchdog supports — but only Sunwing has a refund policy in place for cancelled routes.

Lukacs said the agency’s statement, which is unsigned, does not carry the authority of an official decision, each of which is signed by one or more of the members who comprise the administrative tribunal.

“There is no binding legal decision behind this statement,” Lukacs said. “Have you ever heard of a court issuing a statement without hearing the parties, and without a judge signing it?”

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The statement posted to the agency site says the watchdog is aiming for a balance between passenger protection and “airlines’ operational realities” as travel controls prompt carriers to park planes and lay off thousands of employees.

“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 statement reads.

“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,” the posting says, suggesting 24 months as a reasonable time frame.

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