U.S. Government Goes After Air Canada For Cancelling Flights, Stealing Customers’ Money

After more than a year Air Canada is issuing refunds to customers whose flights were cancelled due to the pandemic. They’re only doing this now that the Canadian government has forked over subsidies. They told the government they’d give money back to consumers, but only if the government gave them far more money first.

The Canadian government had backed Air Canada’s decision to keep customer money for transportation that was never provided. During Covid the airline needed the money and that was sufficient justification for stealing. For flights to and from the U.S., though, this is a clear violation of U.S. law. As the Department of Transportation explains,

A passenger is entitled to a refund if the airline cancelled a flight, regardless of the reason, and the passenger chooses not to travel.

This straightforward rule wasn’t changed because of the pandemic, in fact DOT offered enforcement guidance that finally made bad actors like United Airlines and JetBlue give customers back their money. Air Canada dug in. A year ago my advice was to sue in small claims court.

For its part, Air Canada flipped the bird at the U.S. government, sending the Department of Transportation a truly remarkable response.

There was no way the U.S. DOT was going to accept this but the wheels of government move… slowly. Now, a year later, DOT is initiating enforcement against Air Canada seeking $25,550,000 from the Canadian carrier.

When a carrier cancels or significantly changes a flight to or from the United States, the airline is responsible for providing refunds, upon request, according to U.S. law.

…[DOT permitted airlines to take longer than usual processing the high volume of refund requests] as long as airlines were making a good faith effort. Air Canada did not make such good faith efforts. Instead, for almost one year after the announcement of the May 2020 enforcement notice, Air Canada continued its no-refund policy in violation of U.S. law.

DOT has received over 6000 complaints against Air Canada for refusing to provide refunds during the pandemic. They’ve found 5,110 violations of law.

(HT: @Travel33t)

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. Now pursue United for their theft of paid Lifetime United Club benefits.

  2. Air Canada should not be allowed to land on u.s. runways, only taxiways….. Er, wait, they’re already doing that.

  3. I got my air Canada refund only a couple months ago well over a year from when I purchased my tickets. It’s kind of shocking the Canadian government allowed this. The US DOT should ban them from flying to the US for this.

  4. But now Air Canada is forking over the money freely (after they’ve received their government subsidy ). So will they still owe a fine? For passengers, I don’t see how it makes much difference now. I finally got my refund after the change in policy a couple months ago.

  5. @ Chopsticks – A fine punishes bad (and illegal) behavior. That’s what happened here. The new culpa may help lower the fine but it wasn’t like the situation with UA where they returned money after a stern working from DOT. AC flouted the enforcement for a long time and that will cost them.

  6. Finally!!! I waited for 13 months for a refund from AC. 6 other airlines provided refunds to me in 2-5 months. Air Canada’s response to my request was so flippant and DOT didn’t respond to my complaint (other than acknowledging it) either. I think the Air Canada should be required to provide some interest too. Some of the people were owed refunds into 5 figures.

  7. This is why I won’t buy any tickets on Air Canada anymore. Their behavior wrt this sucks. And my Canadian relatives told me its a terrible airline (this was before Covid). Even TAP refunded my canceled flight.

  8. I have liked Air Canada on the two dozen or so flights I’ve taken with them. Problem is, this goes back to the 1970s, even before their original frequent flyer program. In the last 10 years, I’ve probably averaged one r/t per year max. Never enjoyed the miles game because theirs continued to expire until recently.

    I was ripped off by AC for $6000+ business class tickets to Italy for a friend’s wedding, unable to get a refund after the flights were cancelled when COVID began affecting travel. 18 months later, after way too many hours dealing with this nonsense I’ve been made whole by AMEX finally charging back the tickets to AC. AC’s customer service was dreadful-to-nonexistent. My online agent was terrible and unhelpful. DOT empathized but didn’t do anything for months and months. AMEX itself was a joke, a real laugher (they first claimed no refunds 60 days after tickets were purchased. Then they claimed AC’s policy was just fine. Then they went silent. When they finally responded with something more than a form letter, they refunded one ticket of our pair, requiring me to repeat this whole process again to get fully refunded). It is deplorable how DOT is only potent when pushed and pushed; how the Canadian Government took its sweet time forcing AC to make refunds; how some ash hole at AC dreamed stealing your customers’ money as a means of avoiding obtaining financing. DOT’s latest fine of AC will probably be vastly reduced, but in any case none of us will see any share of it for our trouble, will we Pete?

    No, AC will only appear on my credit card statements in the future when absolutely, positively necessary or as an incredible deal, with them making little or no profit. If others are equally irate, this forecasts the airline’s demise due to the reputational hit caused directly by the wannabe junior executive who dreamed this up. He/she should be fired, perhaps jailed, prior to being ejected from Canada for ruining the one formerly proud national airline remaining in this vast country. This was about as good a judgement as VW installing software to let their diesel cars pass exhaust tests while failing to limit carbon from the tailpipe, and thinking they could get away with it in perpetuity. Heads should have rolled. *We will not forget*.

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