July 8, 2020
In its June 26, 2020 answer to a pending U.S. Department of Transportation (DOT) enforcement proceeding, Air Canada stated that it is not obligated to issue refunds to passengers whose flights were cancelled by the airline where the fare rules for the tickets in question do not require it.
The airline’s position runs counter to the DOT’s longstanding regulation – reiterated in its April 3, 2020 Enforcement Notice – that requires carriers to provide passengers with a full refund when the carrier cancels the flight or makes a significant change in the flight schedule and the passenger chooses not to accept any alternative offered by the carrier. The DOT maintains that the requirement applies to foreign carriers as well when the flight in question was scheduled to depart from or travel to a point in the United States.
While Air Canada has of late been the subject of numerous consumer refund complaints filed with the DOT, the June 26 filing sets forth no less than four legal grounds for refusing to issue the refunds. Notably, Air Canada asserts that the DOT’s Enforcement Notice does not have the force of law and that even if it did, any attempt by the DOT to apply it would constitute “an unwarranted extraterritorial application of U.S. law.” Its assertion is surprising given that to our knowledge no foreign air carrier had previously been successful in challenging the regulation on that basis.
Regardless of whether any of Air Canada’s legal arguments will ultimately be found to have merit, ASTA finds its position disputing the DOT’s authority to mandate refunds to be disappointing in terms of fundamental fairness when the situation is viewed from the traveler’s perspective. As the DOT notes, the question is “not on whether the flight disruptions are within or outside the carrier’s control, but rather on the fact that the cancellation is through no fault of the passenger.”
Furthermore, Air Canada’s current policy denying refunds represents a substantial and unexpected departure from its past policy of providing full refunds under similar circumstances, which it now characterizes as merely a “goodwill gesture.” To be fair, Air Canada’s recently revised cancellation and rebooking policies are not, as written, unfair when the impacted consumer is amenable to receiving a voucher for future travel, and in most respects, they do align with the best practice recommendations of the Association of Canadian Travel Agencies (ACTA). However, in our view it works a substantial injustice for consumers that justifiably relied upon the DOT refund regulation and Air Canada’s previous policy which reflected its adherence to it.
ASTA applauds the many airlines that have responded to the crisis by freely providing refunds for flights cancelled when requested by the traveler. We commend those carriers that, despite the difficult circumstances, have honored their obligations to their passengers under the DOT’s mandate and call on Air Canada to do the same immediately by reversing its current position on refunds. By doing the right thing for the affected passengers, abiding by the established rules and promptly providing refunds for cancelled flights when requested, Air Canada can maintain the trust and confidence of both the agency community and the traveling public as a whole.
Rebranded in 2018 as the American Society of Travel Advisors, ASTA is the leading global advocate for travel advisors, the travel industry and the traveling public. Its members represent 80 percent of all travel sold in the United States through the travel agency distribution channel. Together with hundreds of internationally-based members, ASTA’s history of industry advocacy traces back to its founding in 1931 when it launched with the mission to facilitate the business of selling travel through effective representation, shared knowledge and the enhancement of professionalism. For more information about the Society, visit ASTA.org. Consumers can connect with an ASTA travel advisor at TravelSense.org.