MONTREAL –
Three years after the new rules came into effect, the regulator that oversees Canadian airlines has not imposed any fines related to passenger compensation claims for flight delays and cancellations.
The lack of action reveals the Canadian Transportation Agency’s (CTA) unwillingness to exercise its authority on behalf of consumers, says the president of the air passenger rights group Gabor Lukacs.
The lack of fines so far comes despite a flood of complaints lodged by passengers both formally and via social media who say their claims for compensation have been rejected after airlines canceled or delayed their journeys amid the airport chaos of recent few months.
“That’s really where the concern lies — what allows airlines to behave this way,” Lukacs said.
The country’s passenger charter requires airlines to pay up to $1,000 in compensation for cancellations or significant delays resulting from causes within the carrier’s control when notice comes 14 days or less before departure.
But airlines, including Air Canada and WestJet, have refused payments based on crew shortages, citing a safety issue that would have made them exempt from compensation.
The CTA’s position is that understaffing generally falls under the airline’s control and should therefore result in compensation.
“If the crew shortage is due to the carrier’s actions or omissions, the disruption will be considered the carrier’s control for the purposes of the APPR (Air Passenger Protection Rules). “Therefore, a disruption caused by a crew shortage should not be considered ‘necessary for safety purposes’ when the carrier caused the safety problem as a result of its own actions,” the agency said in an email.
Customers whose claims have been rejected by an airline can appeal to the regulator, but the backlog exceeds 15,300, with the time between initial submission and final decision taking up to a year.
Separate from the complaint process, federal law gives agency officials the power to investigate companies and individuals they believe have violated the law, allowing them to demand documents, search premises and impose fines of up to $25,000. fines were imposed this year for such violations as posting unclear terms or conditions, failing to explain why the flight was delayed and not having a charter flight permit.
The agency’s list of enforcement actions does not include any monetary penalties against carriers beyond compensating customers for flight disruptions.
Air Canada passenger Brittany Nope was scheduled to fly with her partner on June 9 from Ottawa to Toronto and then on to the United Kingdom, but the original flight was delayed by more than three hours. When the couple arrived at Toronto’s Pearson Airport, their plane to Manchester had already departed, forcing the couple to book a hotel for $589 and rebook tickets to London Heathrow the next night for $2,260, she said.
“When I filed for compensation for the delay and for reimbursement, both were denied because it was a ‘safety issue’ and I was offered a $300 e-voucher as a ‘goodwill gesture.’ I asked for my complaint to be escalated and appealed, but they did not respond for over 30 days,” Nope said in an email.
Since the Air Passenger Protection Rules came into effect in mid-2019, officials have not issued fines against an airline company of more than $20,000.
The transportation agency did issue 11 fines worth $253,975 in the fiscal year ending March 31. But the bulk – $210,000 of that total – came in the form of fines against Canada’s two major railways. Penalties against air carriers made up most of the remaining $44,000.
Air Canada’s annual revenue before the pandemic was $19.13 billion. WestJet’s annual revenue in 2018, the last fiscal year before Onex Corp. to buy the airline was $4.73 billion.
“Let’s say I’m selling fake watches and my price is $10. I sell for $100 so the profit is $90 for each one. Then the punishment should be such that it is not worth it for me to engage in illegal behavior,” Lukacs said.
“Otherwise, it’s just another cost of doing business.”
In its 2020-21 annual report, the transport agency recommended the government raise the penalty cap to $250,000 for corporations from the current $25,000, which is “outdated as it was set in 1996”, it said in the document.
The agency also said it does not have the authority to deal with a violation that continues day after day, calling for an amendment to allow officials to issue multiple violation notices.
“This will act as a deterrent to continued non-compliance and ensure that service providers resolve issues without delay,” the report said.
Lukacs called the call for a 10-fold increase in the penalty cap “smoke and mirrors,” noting that the agency has yet to issue a fine against airlines approaching the current $25,000 limit in the past three years.
As for compensation claims filed by individuals, the agency said it aims to “resolve the matter expeditiously and informally through facilitation or mediation,” with 97 percent of cases settled that way.
“If facilitation or mediation does not work, the complaint may, at the passenger’s request, then go through an adjudication, a court-like process where a decision will be issued based on the elements of evidence presented.”
This report from The Canadian Press was first published on August 9, 2022.
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