CTA Backpedals On Flight Vouchers, Saying Decision Is Not Binding

Anna Kroupina, Open Jaw

The Canadian Transportation Agency (CTA), Canada’s aviation regulator, is clarifying its earlier statement on flight vouchers. In a FAQ published on April 22, the CTA says its initial position on airlines' right to issue travel credits instead of a refund for cancelled trips is "not a binding decision."

The CTA says its statement on vouchers, published March 25, offers "suggestions to airlines and passengers in the context of a once-in-a-century pandemic, global collapse of air travel, and mass cancellation of flights for reasons outside the control of airlines."

The clarifications come in the wake of a slew of questions to the agency, a class action lawsuit claiming airlines are unfairly denying customer refunds, and an online petition that has garnered just under 13,400 signatures at the time of publication. The petition calls on the Canadian government "to refuse to provide bailouts for any Canadian airline that does not fully refund its Canadian customers now."

The CTA's statement last month said that airlines only have to offer passengers travel vouchers or credits for cancelled flights due to the COVID-19 pandemic, as long as they do not expire in an unreasonably short period of time (the CTA said 24 months would be considered "reasonable in most cases").

Several readers called that into question in emotional comments on a recent Open Jaw article on the subject.

"CTA and IATA say refunds aren't possible. US customers get a refund. EU customers get a refund. And that's on any airline that flies to the US or the EU - not just domestic carriers. So US or EU citizens that have purchased an Air Canada ticket for example, get a refund, Canadians don't. It's not complicated. Canadians just have weak consumer protection legislation," commented a user identified as "croozer".

Likewise, a user identified as "Grant" commented, "These are our clients, some of which have lost their jobs and have no income. Clients deserve a refund. The CTA has overstepped its mandate with their statement on vouchers. Its not their job to determine if vouchers are acceptable. It is their job to uphold the airline tariff system which tells everyone they deserve a refund!"

In its newly published FAQ, the CTA still reiterates its position that "the use of vouchers could be a reasonable approach in the extraordinary circumstances resulting from the COVID-19 pandemic, when flights are cancelled for reasons outside airlines' control and passengers have no prospect of completing their itineraries."

Another criticism of the CTA's stance on airlines issuing vouchers was the dichotomy with U.S. and EU regulators, who have both stated that airlines should give refunds.

The CTA explained the reason for the difference by saying: "The American and European legislative frameworks set a minimum obligation for airlines to issue refunds when flights are cancelled for reasons outside their control. Canada's doesn't."

The CTA says that passengers can ask the airline for a refund, but cautions that some airline tariffs might not provide for a refund and others might include force majeure exceptions to refund provisions.

"Sometimes, the airline may offer a voucher that can be converted to a refund if the voucher hasn't been used by the end of its validity period. This practice reflects the liquidity challenges airlines are facing as a result of the collapse of air travel while giving passengers added protection in the event that they ultimately can't take advantage of the voucher," indicates the CTA in the FAQ.

The agency further notes that passengers who think they are entitled to a refund can still file a complaint with the CTA and each case will be decided on its merits.

Click here to read the Canadian Transportation Agency's FAQ statement in full.

Anna Kroupina

Anna Kroupina Journalist

Anna is OJ's newest member and she joins the team as a writer/reporter. She co-writes the daily news and covers events. Although she's new to the industry, pursuing a career path in travel/tourism has been a goal since her first family road trip to the Florida Keys sparked a desire to discover the world and this exhilarating, fast-paced industry.


Comments

RJ - April 25, 2020 @ 14:30
My question is: What are the rights of clients who booked through Canadian supplier with all flights on an American airline- Delta. Will Delta or the Canadian supplier refund my clients?

Al - April 25, 2020 @ 05:42
I believe customers should get a full refund, it wasn't their fault either! Why should they bare the loss alone!
Unless the Airlines can come to a fair agreement with their customers, keeping the money while customers are paying interest on something they can't use and risking to lose some of it's value as the flight price may be raised by the time they redeem, is totally unfair! I might be willing to accept a similar flight to the same location without any additional fees, but definitely not when I could lose the difference or have to pay more!

Mike Damani - April 24, 2020 @ 17:38
CTA statement is reasonable in the Canadian context. Comparison with EU and US are totally irrelevant. Canada is not the center of the world or densely populated like EU is. The US has election this year so it can bend backwards but its totally different market than Canada. Airlines are not responsible for COVID-19 and can not recover their costs already incurred and with no fresh revenue, they just can not refund the clients.Credit or voucher is a reasonable option in such extra ordinary circumstance.

Alan Bowen - April 24, 2020 @ 15:11
The comments of the CTA are being used in Europe by AC, WS and TS to deny customer rights to refunds for flights that have been cancelled. The damage to the reputation of Canadian airlines should not be underestimated, there is no suggestion that the CTA advice was a recommendation but that it was law. Revenue collected for unflown sectors should still be in the hands of airlines and returned if customers and agents request it.

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