Canadian Government Backs Off Supporting Airlines Who Stick It To Customers On Refunds

The U.S. government is clear that airlines must refund passengers whose flights are cancelled. The European Union is clear on this too but airlines have ignored their rules. In fact, European airlines have offered refunds to Americans (or where itineraries touch the U.S.) but not for Europeans (travel that doesn’t touch the U.S.).

Canada had been clear that airlines do not have to refund passengers for cancelled flights. Their government said vouchers valid for 24 months are fine.

Of course, for flights touching the U.S. Canadian airlines are still obligated to provide refunds under U.S. law. When they refuse,

After the DOT spoke, the worst offenders United Airlines and JetBlue found religion and started issuing refunds to customers upon request.

Now Canada is even backtracking a bit saying that their earlier guidance that airlines weren’t responsible for refunds if they offered 24 month vouchers was merely a suggestion about what seems fair. It wasn’t a statement of policy or of how they’d rule on any given complaint. (HT: Tyler K.)

“The statement on vouchers suggests what could be an appropriate approach in extraordinary circumstances, but doesn’t affect airlines’ obligations or passengers’ rights,” the agency said in the FAQ section of its website.

“Some airline tariffs might not provide for a refund and others might include force majeure exceptions to refund provisions.”

The CTA further notes that travellers who are denied a refund can file a complaint — a word left out of the regulator’s original statement on vouchers.

A fair read of the Contracts of Carriage for WestJet and Air Canada suggest that cancellations outside of those airlines’ control entitle the passenger to a refund. And past Canadian government decisions have been clear that refunds are due when flight cancellations are outside the airline’s control. The airline needing the money wouldn’t give the carrier the right to a customer’s money for services that haven’t been provided under these precedents.

Some airlines have offered vouchers worth more than the amount of the ticket to entice customers to choose the voucher rather than the refund. That’s a better (voluntary) approach for airlines to take.

The things to watch out for are that you need to be confident that you will use it within the timeframe allotted. That means you will be able to travel based on your health and financial circumstances. It means that the airline will be able to take you where you want to go, based on its own financial health (will still be in business) and service patterns (will still serve your city).

An airline might go bankrupt. It might stop service to your city. It may not have the lowest fare or best schedule when you go to book later, but you’re forced to fly them anyway to use the voucher. You might lose a job, lose your health, and need the cash versus airline scrip. Or you may simply prefer to travel somewhere else that the airline offering the voucher isn’t best situated for.

As a result I like vouchers if you’re financially secure (can spare the cash), not worried about health getting in the way, and they’re being issued by one of the largest airlines – that’s also the largest airline in your home city.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I got a voucher from Alaska Air. Probably could have gotten a refund if I pushed harder. However, to be honest, it was not that much money, and I am hoping Alaska Air survives in its current form.

  2. Unfortunately, they aren’t the only airline taking advantage of the situation. There are a lot of Canadians in the Philippines looking at over $3000 to get on a flight back to Canada. It’s awful. 🙁

  3. You can add Air New Zealand to the list of airlines sticking it to customers.

    I would be okay with a credit but as a Canadian citizen chances are slim that I will get a chance to use the credit now that they are changing to be only a domestic carrier and eliminating most if not all international routes.

    I have explained this to them in numerous emails but rather than do the right thing they are fighting for survival I guess and coming up with all sorts of reason as to why I won’t get a refund and I’m stuck with an expiring credit.

  4. Interesting that the US DOT seems to have the most sway with airlines. Consumer protections are considered pretty strong in the EU, but EU carriers are only really offering true refunds for cancelled flights for flights that touch the United States.

  5. This is an opportunity to directly involve U.S. Senator Ted Cruz, Chairman of the Senate Subcommittee on Aviation, to create national policy to require all foreign airlines to adhere to U.S. consumer protection laws and FAA regulations requiring the full refund of all tickets without delay.

    Although the European carriers apparently think they can defy EU regulation #261 governing such related issues, these carriers should be immediately informed by the DOT/FAA and Department of Justice that if they defy our requirements, their landing rights in the USA will be withdrawn until they make it right by fully refunding US passengers.

    An error initially made in the arrangement for US airline bailouts was to fail to require those US carriers with code-sharing agreements to ensure those foreign carriers abided by American law and regulations to refund tickets.

    Currently, I am working on this issue for myself with an EU carrier that refuses to refund $2800; wrongly thinking their offer of voucher remedies the situation. News flash-no, it does not; I want my refund now, or, this will become an issue for that carrier.

  6. How dare these socialists stop a capitalist organisation from getting government support. The horror. Fuhrer will take action soon

  7. Aeromexico denied my refund request for flights they cancelled even after I pointed out the refreshed DOT guidance.

    “…we have confirmed that your flights underwent cancellation due to an external contingency and unfortunately under contract of carriage, this is considered to be beyond the carrier’s control.”

    I have since made a DOT complaint and a credit card dispute.

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