Court upholds all airline compensation rules – except one

As you may recall, Air Canada, Porter and 16 others, including the International Air Transport Association (IATA), asked a Federal Court of Appeal earlier this year to quash compensation rules for air passengers who encounter delays or lost/damaged luggage.

The group’s argument, made public last April, was that Canada’s passenger rights charter, which took effect in July 2019, violates global standards and should be rendered invalid for international flights.

The charter, for example, states that airlines must compensate those who are bumped due to an overbooked flight or who face delays that are unrelated to safety, refund/rebook passengers when delays occur, among other things.

The outcome of this appeal surfaced Tuesday (Dec. 6) and it appears the rules will mostly be upheld.

As reported by the Canadian Press, a federal court has dismissed the appeal that challenged the passenger bill of rights – with the exception to one rule related to the temporary loss of luggage.

The bill of rights took on a new meaning at the beginning of the COVID-19 pandemic when mass flight cancellations, brought on by lockdowns and border closures, inconvenienced thousands of air travellers.

Recently, in September, new protections for air travellers kicked in following an amendment to the regulations that now requires airlines to refund passengers if they cannot provide a new reservation within 48 hours of a flight cancellation or “lengthy delay.”

This applies even when those cancellations or delays are outside the airline's control, such as nasty weather events or a pandemic.

READ MORE: Passenger bill of rights to be strengthened, says Alghabra; CTA complaints slow down

The changes were made to close a gap that was exposed during the onset of the pandemic in 2020 when airlines began cancelling flights and denying refunds to customers.

The updated regulations aim to ensure that when cancellations and delays occur, passengers will still be protected if the airline cannot complete the itinerary within a reasonable period of time, as France Pégeot, CEO of the Canadian Transportation Agency (CTA), explained in June.

But the changes haven't been universally embraced. 

At the time, WestJet’s vice-president of government relations, Andrew Gibbons, told the Globe and Mail that WestJet was “disappointed” that the new rules unfairly makes it the “sole provider of reimbursement” for delays it cannot control.

The airline believes federal agencies like the Canadian Air Transport Security Authority and the Canada Border Services Agency, as well as airports, should all be involved in air passenger protections.

Rules will be strengthened

A request from airlines to suspend the Air Passenger Protection Regulations (APPR), initially launched by the airlines in 2019, was denied by the Federal Court of appeal in 2020.

In court filings, the airlines argued that the regulations exceed the CTA’s authority and went against the Montreal Convention, a multilateral treaty, by imposing higher compensation requirements for cancellations or lost luggage.

For instance, the rules demand more damages based on the length of a delay and regardless of “the actual damage sustained by each individual passenger,'' according to the appellants.

Ottawa argued that there is no conflict between the passenger protections and the Montreal Convention, the Canadian Press reported. 

But the court said the interpretation of “lost baggage,” which entitles passengers to compensation for misplaced or damaged luggage, was inconsistent with the Montreal Convention.

The passenger rights that were upheld this week by the federal court of appeal include:

• Compensation for delays and cancellations;
• Compensation for denial of boarding due to overbooking;
• Standards of treatment (passengers impacted by cancellations or long delays must be provided food/drink and access to communication);
• Accommodations (passengers must receive hotel accommodations, paid for by the carrier,
  as well as transportation to the hotel and back to the airport, when faced with overnight delays);
• Assignments of seats for children (airlines must assign a seat to children aged 14 and under within close proximity to a parent or guardian at no extra charge).

The issue of air passenger rights in Canada gained steam following a 2017 summer incident in which two Montreal-bound Air Transat jets were diverted to Ottawa because of bad weather and held on the tarmac for up to six hours.

Air Transat, which apologized for the incident, was fined $295,000 after a decision by the CTA put the carrier at fault. Passengers on board the flights were also compensated.

Following a turbulent summer of airport inefficiencies, the Canadian government recently announced that it will strengthen its air passenger bill of rights further. 

Speaking to reporters on Nov. 28, Minister of Transport Omar Alghabra noted the "unacceptable" issues travellers faced at airports this year, from delayed and cancelled flights to misplaced luggage.

The remarks came one week after Alghabra met with the aviation sector at a summit, where ongoing issues facing air transportation, and possible solutions, were discussed as the busy winter travel season approaches. 

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