Air Canada Illegally Flouting Customer Compensation Rules

Air Canada was one of the worst actors of the pandemic. They took customer money for tickets, and then when they cancelled flights they kept the money.

The Canadian government backed up the airline suggesting customers who were out the money should have sympathy for how hard it was in the airline business. It’s only when Canada gave its flag carrier subsidies that the airline released the funds to customers that it had been holding hostage. (In other words, refunds were provided by taxpayers, who whose pockets were picked for far more by this bac actor for the privilege.)

The U.S. government even settled its refund dispute with Air Canada with the largest fine it ever levied The DOT’s new Notice of Proposed Rulemaking is even inspired in part by Air Canada’s blatant disregard for norms and rules.

So it should come as no surprise that the airline has a new trick up its sleeve. They’re flouting Canadian passenger compensation rules for cancelled flights by claiming that their lack of staffing which causes a cancellation is a safety issue. And the law allows airlines to cancel without compensation when it’s to protect safety. After all, you wouldn’t want to create a financial incentive to ignore safety.

A customer relations email to Farrell obtained by The Canadian Press said, “since your Air Canada flight was delayed/canceled due to crew constraints resulting from the impact of the COVID-19 pandemic on our operations, the compensation you are requesting does not apply because the delay/cancellation was caused by a safety-related issue.”

Air Canada’s response to Farrell is part of a company-wide policy that instructs employees to classify flight cancellations caused by staff shortages as a “safety” problem. Doing so excludes travelers from being able to access compensation under federal regulations, according to the company’s policy.

In Canada, the Air Passenger Protection Regulations require airlines to pay up $1,000 in compensation for cancellations or significant delays that are within the carrier’s control when the notification comes 14 days or less before departure. Airlines do not have to provide any payment if the change was required for safety purposes.

The Canadian Transportation Agency says this is clearly illegal, that lack of staff is a reason for cancellation and cannot be lumped in with safety issues. But what should the Canadian government expect? They clearly taught Air Canada that they could get away with abusing customers and flouting refund rules, even defending the practice. And it’s only when Air Canada was given more money than the cost of refunds (making a profit on refunds!) that money flowed. Why wouldn’t they go back to this well?

The sad thing is that while American Airlines and Delta were fairly honest and fair-dealing in handling customer refunds during the pandemic, and United and JetBlue were closer to the Air Canada camp until the DOT put its boot on their necks, there’s been little reputational benefit that accrued to the better corporate citizens and little consumer punishment for the scofflaws. To the extent we let airlines get away with ripping off customers, it’s our fault too right?

(HT: @crucker)

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