Federal Regulator Proposes New Compensation Rules for Air Passengers

People are shown at Pearson International Airport in Toronto on March 10, 2023. (The Canadian Press/Nathan Denette)

Airlines cannot deny passengers compensation for poor service in situations they “knew about, or should have known about,” says a federal transport regulator in changes proposed under the Air Passenger Protection Regulations (APPR).

Compensation for flight delays must be paid “except in exceptional circumstances” which the APPR will identify, wrote the Canadian Transportation Agency (CTA) in its consultation paper, published on July 11, as first reported by Blacklock’s Reporter.

“Overall, the proposed changes would require airlines to provide passengers with compensation for every flight disruption that results in the passenger arriving at their destination more than three hours after their scheduled arrival, or delays at departure of over three hours which result in the passenger deciding not to travel,” said the paper.

The CTA has a current backlog of more than 46,000 complaints—mainly in disputes over travel delays, cancelled flights, and lost baggage. It has estimated hundreds of thousands more passengers had legitimate claims, but never filed.

The purpose of the consultation paper, according to the CTA, is to gather feedback from Canadians on its proposed changes in order to “clarify, simplify and strengthen the Canadian air passenger protection regime.”

Burden of Proof

The regulator added it is putting the burden upon airlines to prove any flight disruption or delay is indeed an exceptional situation.

Under the proposed changes to the APPR, circumstances that would not be considered exceptional include “any situation the airline knew about, or should have known about, when it sold the ticket to the passenger,” the agency wrote.

Flight crew or cabin crew unavailability, staff shortages at the airline, and technical problems that are an inherent part of normal airline operations were also items mentioned in the list. And “any action, or failure to act, by the airline or others with which the airline has a contractual relationship” would also not be considered exceptional.

For exceptional circumstances, the event that caused the disruption “must have been outside the airline’s control, and not inherent to the normal exercise of the activities of the airline,” the CTA said of the criteria currently under consideration for determining such cases.

Other criteria being considered is whether “the event could not be avoided even if the airline took all reasonable measures to do so.”

Such circumstances could also include events of war, terrorism, bad weather conditions, natural disasters, health risks or medical emergencies, as well as labour disruptions at the airline or by air service providers such as airport managers, the paper said.

‘Cannot Do It Alone’

CTA’s consultation paper came shortly after cabinet’s omnibus budget Bill C-47 received royal assent on June 22.

In April, Transport Minister Omar Alghabra announced that proposed amendments to the Canada Transportation Act have been introduced as part of the bill to “strengthen air passenger rights and simplify the complaint resolution process.”

Bill C-47 would require that airlines settle passenger complaints within 30 days and “publish information respecting their performance” on company websites. Airlines that fail to properly compensate customers for poor service are threatened with unspecified increases in penalties.

The APPR, which came into force in 2019, promised passenger compensation of $400 for a three- to six-hour flight delay, $900 for denial of boarding delay of up to six hours due to overbooking, up to $2,350 for lost or damaged luggage and a maximum $25,000 in penalties for the airline for non-compliance.

Testifying before the Senate Standing Committee on Transport and Communication on May 16, Jeff Morrison, CEO of the National Airlines Council, said, “Nothing in these APPR amendments will improve or strengthen air travel in Canada.”

“The changes don’t improve airport infrastructure; they don’t hold other air travel entities to any sort of accountability standard; and they don’t lower the cost of air travel. In fact, Bill C-47 will increase cost of travel,” he said.

“Airlines cannot do it alone.”