Revised airline compensation rules will do little to change status quo: experts

TORONTO -

Proposed changes to Canada's passenger rights charter will perpetuate loopholes that allow airlines to forego compensating travellers whose flights are disrupted, say airline experts.

Ottawa has proposed an update to rules surrounding airlines' obligations when a flight is delayed or cancelled by designating certain factors outside a carrier's control, such as weather that could affect flight safety, as "exceptional circumstances."

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Under the amended rules, airlines are still generally not required to provide compensation for inconveniences to passengers in situations involving such factors, though there are some exceptions.

But Air Passenger Rights advocacy group president Gabor Lukacs called the weekend announcement of the proposal "deceptive" and said that Transport Canada is actually "preserving the status quo."

He said that under the newly outlined rules, which are now open to a 75-day feedback period, around half of flight delays and more than two-thirds of cancellations would still not qualify for compensation.

Previously, Canada's passenger rights charter -- which took effect in 2019 -- divided flight disruptions into three categories: those caused by factors within the carrier's control, disruptions within the carrier's control but required for safety purposes, and those outside the airline's control.

Passengers had only been entitled to compensation in the first of those categories.

Lukacs said the government's amended rules merely give a new title to the latter two categories. He called it "semantics."

"They are just renaming the two categories when no compensation is owed as 'exceptional circumstances,"' he said.

The changes seem to do little to firm up when airlines will have to pay, said John Gradek, who teaches aviation management at McGill University.

"Now they call it exceptional circumstances, and now we're going to have a debate as to how do you define exceptional circumstances. So they jump from one murky issue to another murky issue," said Gradek.

"That doesn't solve the problem."

He said he would have preferred to see regulators shift to the model used in the EU that puts a higher onus on the airlines and makes exemptions in the most unusual cases.

In announcing the proposed changes, Transport Minister Anita Anand said the goal is to provide more clarity for both travellers and airlines.

"The proposed amendments eliminate grey zones and ambiguity about when passengers are owed compensation, which will ensure quicker resolutions for passengers," she said in a statement.

She said the rules aim to find a balance between protecting the rights of passengers and promoting a competitive air sector.

A traveller walks to security screening at the Vancouver international Airport in Richmond B.C., Sept. 18, 2024. THE CANADIAN PRESS/Ethan Cairns

The Canadian Transportation Agency has been working to amend regulations associated with the Canada Transportation Act since the Liberal government passed legislation last year aiming to tighten rules for passenger rights.

The changes appeared to scrap a loophole through which airlines have denied customers compensation for flight delays or cancellations when they were required for safety purposes.

The reforms also put the onus on airlines to show a flight disruption is caused by safety concerns or reasons outside their control.

The draft regulations published Saturday would require carriers to provide meals to passengers whose flights are delayed at least two hours, along with overnight accommodation if necessary, even in exceptional circumstances.

Ottawa said those factors would also include security threats, unscheduled airport closures, bird strikes, or aircraft damage that could affect flight safety, among other examples.

The requirement to assist passengers in any delay over two hours gives some clarity, but is a fairly small tweak, said Gradek.

"They're doing what I would call baby steps to clean up the act."

If a flight has been cancelled, or if a passenger has been bumped, the proposed amendments require the air carrier to rebook a passenger on its next available flight or that of a partner airline, also in any circumstance.

Airlines also have an obligation to rebook a passenger who has missed, or is likely to miss, a connecting flight because of an earlier flight disruption on the same itinerary.

Carriers would have to provide refunds within 15 days, down from the current deadline of 30 days, if a passenger prefers to be reimbursed rather than rebooked when their flight is cancelled, delayed at least three hours, or they are bumped from the flight.

That timeline shift is meant to better align with practices in the U.S. and the European Union, the federal agency said.

However, Lukacs said those regions actually require carriers to deliver refunds within seven days.

"Somehow the airlines managed to convince the government that miraculously, north of the border, apparently reindeer cannot deliver the refund in seven days," he said.

"Perhaps the refunds come in a horse cart or something."

Asked why the proposed regulations aren't going further to align with standards in other regions, the Canadian Transportation Agency said these are draft recommendations and they're looking for feedback.

"This is not a final regulation," said Tom Oommen, director general of the analysis and outreach branch at the CTA during a media briefing.

"It is for consultation, and of course, input received during the consultation will be considered in the development of the final regulations."

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He said the proposed changes were developed after consultation with the minister of transport, and he expects to see healthy input on the proposals from all stakeholders.

The regulations include a $250,000 maximum fine for airline violations, marking a tenfold increase over existing penalties.

The federal agency said it estimates the proposed amendments would cost carriers around 99 cents per passenger flight annually, or around $512 million over a 10-year period after they come into effect.

While the various changes could mean more compensation for passengers, the rules overall seem to have done little on the greater goal of actually improving airline on-time performance, said Gradek.

He noted that the latest performance metrics from November show how pitiful Canadian airlines and airports are when it comes to conducting flights on time.

"The objective of the (regulations) was to improve it. Unfortunately, experience has shown us that it hasn't done a damn thing. In fact, it's gotten worse."

This report by The Canadian Press was first published Dec. 23, 2024.