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No refund for travellers who cancelled flight already scrapped by airline: regulator

Four years on, the controversy over whether airlines owed refunds to passengers after cancelling hundreds of thousands of flights during the pandemic continues to simmer, aggravated by a sluggish, opaque complaints process.
People wait with their luggage at Pearson International Airport in Toronto on Friday, August 5, 2022. A ruling from the Canadian Transportation Agency says that a couple who called to cancel their booking on a flight that had already been cancelled by the airline means they are not entitled to a refund. THE CANADIAN PRESS/Nathan Denette

Four years on, the controversy over whether airlines owed refunds to passengers after cancelling hundreds of thousands of flights during the pandemic continues to simmer, aggravated by a sluggish, opaque complaints process.

In the first months of COVID-19, grounded planes and slashed schedules prompted most carriers to grant passengers travel credit. The airlines claimed they were not obliged to reimburse customers, citing a March 2020 statement from the Canadian Transportation Agency.

Now, even after regulatory changes that mandate refunds for flights scrapped due to a reason outside airlines’ control — whether it's a pandemic or a snowstorm — some Canadians still face rejection of long-standing reimbursement requests.

A recent ruling from the regulator found that one couple was not entitled to a refund because they chose to cancel their 2020 booking — for a flight the airline had already cancelled.

In a confidential decision obtained by The Canadian Press, a complaints resolution officer at the agency said the two passengers qualified for no more than a voucher because they cancelled their reservation with WestJet. The officer pointed to the conditions of their ticket.

“Although WestJet announced a route suspension, this does not change the terms and conditions of the ticket when the passenger initiates the cancellation first,” the officer wrote on Dec. 28.

But those conditions — laid out in the company's policies and posted on its website — stated that in the event of flight disruptions outside the carrier’s control, the customer “will be refunded” in the original form of payment if they turn down an alternate travel route.

Moreover, then-WestJet CEO Ed Sims had announced a day before the couple called off their late-March trip that the airline would cancel all flights for at least 30 days starting on March 22, 2020, for reasons related to COVID-19.

The couple, who asked to remain unnamed due to legal concerns — any decision from the agency’s complaint officers is confidential unless both parties agree to its release — described the situation as a “nightmare.”

“How can you cancel a flight that’s cancelled?” one asked.

They are still about $4,000 out of pocket, they said. “To us, that’s no small amount.” 

WestJet did not respond to questions about that case. 

A drawn-out complaints process has added to travellers' frustrations. 

The couple filed their complaint with the regulator in March 2022, and said they received the decision in January of this year — a 22-month wait.

The complaints backlog at the transportation agency had grown to about 71,000 as of late April, its highest tally yet.

Withholding refunds was common in the first year or more of the pandemic, a move that garnered backlash from customers. The number of battles still playing out over the issue is tough to discern, since the regulator’s complaint rulings are not public, advocates say.

“It does create a chilling effect of people being afraid to speak openly,” said Gabor Lukacs, president of the Air Passenger Rights advocacy group.

He also accused the agency and the airline of ignoring the facts of the couple’s case.

Refund obligations at the time came down to the conditions attached to the ticket, since airlines were not required to reimburse in force majeure situations until an update to the passenger rights charter in 2022, said transportation agency spokesman Jadrino Huot.

At the outset of the pandemic, regulations “only require that the airline ensure passengers can complete their itineraries,” states an agency post from March 25, 2020. “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.”

Several older decisions by the federal agency itself appear to contravene the post, with at least three rulings since 2013 affirming air travellers’ right to a refund regardless of tariff conditions or whether a flight cancellation is beyond the airline’s control.

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.” That finding came despite the fact that Porter's tariff — the airline-passenger contract — stipulated a no-refund policy for force majeure delays and cancellations.

“Breaching those decisions would be like contempt of court,” Lukacs claimed. Either way, WestJet's tariff included no such provision, he said.

The Public Interest Advocacy Centre said in April 2020 it had received “many complaints from consumers about future cancelled flights and the lack of refunds for these flights.”

To hold on to millions of dollars in fares amounted to a seizure, argued John Lawford, who heads the consumer rights organization.

“When airlines take large sums from consumers for future flights, and do not segregate those funds in trust but instead use them as operating funds, they have effectively taken consumer money for nothing,” he wrote in 2020.

Vouchers are not tantamount to reimbursement, he added. Lawford pointed to older Canadians unlikely to use store credit down the line “for health or financial reasons, or simply due to the uncertainty of future air travel.”

After holding out for more than a year, most airlines began to offer refunds for flights cancelled due to the pandemic as a condition of federal aid packages.

“As the situation evolved, we opened refunds to travellers who were issued a credit due to COVID, whether the booking was cancelled by us or the passenger,” said Andréan Gagné, a spokeswoman for Transat A.T. Inc.

WestJet, which never fell back on federal support, was the first carrier to offer refunds to some passengers in October 2020. But it said those refunds would not apply to customers who cancelled their own trips or who purchased non-refundable basic fares, “in line with its regulatory tariff and booking conditions that were in place pre-COVID” — and in spite of tribunal precedent.

This report by The Canadian Press was first published May 13, 2024.

Christopher Reynolds, The Canadian Press