CTA Says Airlines Not Required to Refund Passengers
UPDATE- As mentioned by one of the comments below, please note that the CTA’s position is not legally binding, it is what they are “saying” at the moment. The problem is even though the law might say passengers are entitled to a refund, the airlines are trying to find a loophole around the law, which is creating an issue. So the point of this post is for me to propose a win/win compromise so that we do not have to involve the government to regulate this.
Yesterday, CBC reported that the Canadian Transportation Agency (CTA) said that “airlines are not required to refund passengers for flights cancelled due to the COVID-19 pandemic or other reasons outside an airline’s control.”
So there we have it. It will be up to the airlines to decide whether they want to refund passengers or not for a cancelled flight. The CTA took a stance this issue (see updated notes at the top). So I thought I’d share my pros and cons from each perspective and offer a possible compromise solution.
Arguments for the airlines
The reality is that airlines are loosing a lot of money because travel has decreased drastically. I already wrote a post about airlines cutting employees across the board. Sunwing, which was missing from my previous list, have now laid off 1,500 employees.
Airline companies need some cash flow to keep their business afloat and constantly refunding tickets is not sustainable. If airlines go bankrupt, nobody wins in the long-run.
Arguments for the passengers
There is a very simple argument here. If airlines cancelled the flight, even if it is for conditions out of control, passengers do not want to pay for services that were not rendered.
Compromise
Here’s my compromise:
- Airlines do not have to refund pre-paid tickets but should waive re-booking fees. Put a limit on the number of times they waive the re-booking fee to prevent abuse, but factoring in future possible cancellations if this crisis drags on.
- Allow passengers to book another flight within the next 18 months (instead of just 6-12 months from now) without incurring a price difference. The argument is that if I paid $800 for a flight, I don’t want to be paying an additional $400 for changing my flight date because it cost more to fly at that time. Had it be $1,200 ($800 + $400), I may never have booked that flight at that price in the first place.
- The price difference only kicks in if it is a different route.
The Result
This ends the argument of refunds to passengers, so that airlines can maintain their cash flow. In return, airlines give a little more flexibility to passengers without worrying about incurring additional fees (i.e. price difference) for changing their flight during this time. BUT! Airlines have a limit to the number of times we can re-book (discretionary) to prevent abuse of the system.
Complete BS. We are talking about companies that are taking billions of dollars and aren’t saving for a rainy day. Then, they can skirt the rules in place when it suits them.
I really hope the airlines do something customer friendly seeing as the ruling favours them a lot.
Sorry but as a travel blogger, you should do more due diligence prior to reporting these things.
Blog post and the CBC article is an In-Accurate twist of the facts.
1) The quoted is an unsigned, unattributed statement on the CTA’s website, which has no legal effect:
2) CTA has not made it a legally binding decision or directive. Legally binding decisions are available here – https://www.otc-cta.gc.ca/eng/decisions
3) CTA cannot supersede provincial or federal laws and they clearly state that Airline or travel provider should provide refund in the original form of payment in-case the flight is canceled unilaterally.
Finally, various provincial bodies (esp Quebec) had clarified that although vouchers are an alternative, customers are legally eligible for refund incase the flight is unilaterally cancelled.
Even though it is not legally binding, it is their position at the moment. That’s why I said, CTA “said” in my post. I don’t think I made any reference to legally binding.
Either way, the post was more about a hopeful compromise by airlines so that regulators and governments don’t have to step in.
But thanks for pointing that out. I’ll add a blurb to clarify this.
And to your point about existing laws. Unfortunately airlines are not honouring that, which is why there is an issue.
My comment was primarily triggered by this conclusion
“So there we have it. It will be up to the airlines to decide whether they want to refund passengers or not for a cancelled flight”
Thanks for the prompt update – appreciated 🙂
You’re right. Will tweak that to better represent the reality.
Positive feedback to help improve the post is always appreciated 🙂
Matt, get a petition going and put some pressure on the CTA to actually protect the public. I’m sure all your followers and the followers of those who follow them will be on board.
Depends if you like my proposed compromise though!
May not quite the petition you were look for, but let’s try this one: https://pointshogger.boardingarea.com/government-quarantine-infected-covid-19-in-hotels