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.
- They told the DOT that for tickets sold to consumers in the U.S., for travel to and from the U.S., they weren’t subject to its jurisdiction.
- They argued that applying U.S. consumer law on refunds to a foreign airline was “extraterritorial application of U.S. law.”
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.