Travel credits: the Canadian Transportation Agency clarifies its position

After receiving many questions about its position regarding travel credits offered by air carriers, the Canadian Transportation Agency (CTA) has clarified its position by posting a Frequently Asked Questions (FAQs) page. 

On March 25th, the CTA approved the principle of vouchers or credits for future flights, in place of reimbursements, as the market faces disruption caused by the COVID-19 pandemic.

The CTA considered that "generally speaking, a suitable solution in the present context would be for airlines to provide affected passengers with vouchers or credits for future flights which will not expire in an unreasonably short time (a period a 24 months would be considered reasonable in most cases)." 

However, the CTA emphasized that it would examine the merits of each situation as they presented themselves. 

Purpose of that "statement"

In its FAQ, the CTA specifies that its statement concerning the credits was not meant to be “a binding decision.”

"The Statement on Vouchers, although not a binding decision, 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 CTA wrote.

The unprecedented situation created a serious risk that passengers would simply end up out-of-pocket for the cost of cancelled flights, the association wrote. 

"That risk was exacerbated by the liquidity challenges faced by airlines as passenger and flight volumes plummeted," it said. 

The CTA recalls that the Air Passenger Protection Regulations require airlines to ensure passengers can complete their itineraries... 

“...but do not obligate airlines to include refund provisions in their tariffs," it wrote. 

Canada vs. the U.S. and the EU

The CTA notes that this legislative feature distinguishes Canada from the United States and European Union regulators. This is why the CTA can approve the principle of vouchers or credits for future flights, while the United States and the European Union oblige airlines to grant refunds.

But still, the nuances are essential, notes the CTA.

“Some jurisdictions have relaxed the application or enforcement of requirements related to refunds in light of the impacts of the COVID-19 pandemic, including European countries that have approved the issuance of vouchers instead of refunds," it wrote. 

Extraordinary circumstances

The CTA notes that use of vouchers could be "a reasonable approach in the extraordinary circumstances resulting from the COVID-19 pandemic"

Why is there an exception to the rule?

"Vouchers for future travel can help protect passengers from losing the full value of their flights, and improve the odds that over the longer term, consumer choice and diverse service offerings -- including from small and medium-sized airlines -- will remain in Canada's air transportation sector," the CTA wrote. 

Passengers can file complaints

The CTA specifies that passengers can still file a complaint with the CTA, which will examine each case on its merits.

It says some airline tariffs might not provide a refund and others might include force majeure exceptions to refund provisions.

"If you think that you're entitled to a refund for a flight that was cancelled for reasons related to the COVID-19 pandemic and you don't want to accept a voucher, you can ask the airline for a refund," the CTA wrote.

What if the airline refuses?

"If you think you are entitled to a refund and the airline refuses to provide one or offers a voucher with conditions you don't want to accept, you can file a complaint with the CTA, which will determine if the airline complied with the terms of its tariff. Each case will be decided on its merits," the association concluded. 

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