Government seeks stronger rules on airline refunds

Many airline passengers are furious with Canadian airlines that have not given them cash refunds for trips that were cancelled because of the pandemic. Instead, many of them were offered vouchers to fly at another time. 

In a statement, Canada’s Transportation Minister Marc Garneau acknowledged that there is “a gap in the air passenger protection framework” and he has asked the Canadian Transportation Agency to develop a new regulation on refunds to passengers. The agency is an independent, quasi-judicial tribunal and economic regulator covering air, rail and marine modes of transportation. Among its tasks, it receives and rules on complaints from passengers.

The refunds for cancelled flights should be fair to passengers, but not lead to an airlines insolvency, said the transportation minister. (andresr/iStock)

Assistance for airlines contingent on refunds

The new regulation on refunds would not be retroactive but would apply to future flights that could be cancelled due to reasons beyond the air carrier’s control, such as the pandemic was. 

“This updated regulation should be made in a manner that is fair and reasonable to passengers, and to the extent possible not impose an undue financial burden on air carriers that could lead to their insolvency, said Garneau.

The transportation department  is working on a package of assistance for airlines, airports and the aerospace sector. In the past, the minister has said that assistance to airlines would not be forthcoming until they had fully refunded passengers for flights that were cancelled.

The airlines say they are not legally obliged to issue refunds and they have criticized the federal government for delaying assistance to them.

Besides sending thousand of complaints to the Canadian Transportation Agency, passengers have filed several proposed class action lawsuits and have signed petitions garnering more than 100,000 signatures demanding reimbursement.