Air passenger advocacy group asks top court to hear ticket refund case

An advocacy group is asking the Supreme Court of Canada to hear a case on passenger refunds as frustration over flights cancelled due to the COVID-19 pandemic continues to simmer.

The Air Passenger Rights organization sought leave to appeal Monday a Federal Court of Appeal decision that dismissed the group's attempt for an injunction compelling the Canadian Transportation Agency to remove a post about refunds from its website temporarily while a broader case about the statement's validity is ongoing.

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The CTA said in March that airlines have the right to issue travel credits instead of a refund for cancelled trips in the "current context," though the agency later clarified that the online statement was "not a binding decision."

Canadian airlines have generally offered credit valid for two years or more but avoided offering reimbursement to customers whose flights were called off because of the coronavirus crisis, with carriers citing the agency's stance in response to consumer complaints and analyst questions.

Air Passenger Rights founder Gabor Lukacs says the CTA's statements misled travellers about their right to a refund and contradict the quasi-judicial body's previous decisions.

"If people believe they have no right to a refund, they will just not pursue it," he said in an interview.

"This case is about whether a public body can mislead the public without facing some kind of judicial scrutiny."

Some passengers may not be able to fly in the next two years for health or financial reasons, advocates say. Meanwhile, the airfare they paid amounts to a no-interest loan to airlines.

The pandemic has devastated the airline industry, with billions of dollars in losses for Canadian carriers amid grounded flights and tight international borders.

In contrast to Canadian authorities, the European Commission and the U.S. Department of Transportation have required airlines to refund passengers. The U.S. and European countries including France and Germany have also offered billions in financial relief to struggling carriers, however, while Ottawa has provided no industry-specific bailout to airlines.

Since February, passengers have filed a handful of proposed class-action lawsuits and three petitions garnering more than 109,000 signatures that call for customer reimbursement.

The CTA did not respond to requests for comment Tuesday.

In March, the agency said passengers "should not simply be out-of-pocket for the cost of cancelled flights," but also stated that airlines facing a plunge in revenues and customer volumes "should not be expected to take steps that could threaten their economic viability."

"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)," it said on March 25.

The online statement is not an official CTA decision — these are issued periodically on complaints brought before the body — but Lukacs argues it amounts to an unsolicited advance ruling on how the agency will treat passenger complaints, and thus deters them.

Responses by officials in the airline industry and government suggest the post is viewed authoritatively.

On a conference call Friday, Air Canada CEO Calin Rovinescu told analysts that "the CTA spoke clearly on the topic, and at this point...I've got no reason to believe that they'll change that."

Transport Minister Marc Garneau has also framed the online post as an authoritative ruling.

"The Canadian Transportation Agency has ruled on this issue and has ruled that, in the present circumstances and in a non-binding way, it is acceptable for airlines to offer credits for up to two years," Garneau told the special all-party COVID-19 committee on May 28.

Customer reimbursement for services that were never rendered is a fundamental principle of consumer protection legislation across multiple provinces, Lukacs said.

The CTA's statement touting travel credit as an alternative has served to "undermine" that right, the court submission says, particularly since some credit card and insurance companies have cited the statement as a reason "to deny policy coverage for actual travel disruptions," the court submission says.

The Supreme Court does not automatically hear appeals and instead issues a written decision, usually within one to three months, on whether it will consider a case.

Air Passenger Rights' leave to appeal relates to the Federal Court of Appeal's dismissal of its request for an injunction against the CTA while the case over the travel credits statement is ongoing.

Air Passenger Rights states that the appeal court's test to determine eligibility for such an injunction is too stringent, and could affect not only interprovincial transportation but all areas of federal law, including immigration and refugees, intellectual property law and Indigenous claims.

This report by The Canadian Press was first published Aug. 4, 2020.

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