Airlines ask regulator to extend suspension of passenger compensation rules

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The COVID-19-stricken Canadian airline industry has asked the federal regulator to extend the suspension of rules that require carriers to compensate passengers when some flights are cancelled or delayed.

The Canadian Transportation Agency (CTA) said Friday it has launched public consultations after requests by Air Canada (AC-T), Sunwing Airlines and two industry lobby groups to exempt them from some obligations to customers when flights are disrupted.

According to Canada’s air-passenger protection regulations, if a flight is cancelled less than 14 days ahead of time owing to reasons within a carrier’s control, the airline’s obligations include rebooking the passenger’s ticket or refunding the fare, and paying as much as $1,000 in compensation for the inconvenience. No compensation is required if the cancellation or delay is caused by reasons outside the control of the airline, according rules enacted late last year.

The CTA in March said certain pandemic-related cancellations were outside the control of airlines, and temporarily suspended the rule. The airlines want the suspension extended, arguing cancellations amid the pandemic’s unpredictable travel market are inevitable and outside their control. The carriers want to be free of the compensation requirement if they cancel a flight less than 72 hours in advance or if the passenger is delayed by up to six hours, instead of just the required three hours.

The CTA said in a consultation paper that, generally, flights cancelled during the pandemic in areas under government travel restrictions or advisories – which is most of Canada – are outside the control of the airlines, and are therefore not covered by the compensation requirements.

But the regulator said flights cancelled because of poor ticket sales could be considered within the airline’s control, even during the pandemic. “Carriers may make commercial decisions that are influenced by the pandemic, including decisions to cancel and consolidate flights due to low demand or passenger volumes,” the CTA said. “Flight disruptions stemming from such decisions could be considered within a carrier’s control, but the agency would have to decide this on a case-by-case basis.”

At stake is millions of dollars in passenger compensation at a time the airlines are posting steep losses. Air Canada’s passenger volume has plunged to 8 per cent of its usual level.

Sunwing’s submission to the CTA said the second wave of the pandemic and repeatedly extended government travel restrictions restrictions have rendered the current travel environment worse than ever. Enforcement of passenger-rights laws is “undesireable” and “impractical,” the airline said.

Canada’s five major airlines airlines cancelled more than 189,000 flights from July 1 to Sept. 30, compared with 5,000 in the same period of 2019, according to the CTA. Of the flights cancelled in the recent period, more than 2,000 were cancelled from three days to 14 days in advance.

Transport Minister Marc Garneau has said airlines must provide refunds, an amount estimated in the billions of dollars, if they are to receive financial aid from taxpayers.

The airlines continue to schedule and sell seats on new flights each month, only to cancel or consolidate a portion of them. Air Canada, in its submission to the CTA, defended this practice.

“As we attempt to rebuild our network, Air Canada must make flights available for purchase,” said Air Canada lawyer Martine De Serres. “However, Air Canada cannot sustain the operation of these flights if demand does not justify it, or if it initially does and subsequently evaporates within days of departure as a result of the effects of the ongoing pandemic and government decisions, which are entirely outside of Air Canada’s control.”

The CTA said it will review submissions from industry, the public and other stakeholders until Jan. 15, and make a decision as soon as possible.

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