AIRLINE TICKETS AND COVID-19: HOW TO GET A REFUND FOR FLIGHTS CANCELLED DURING THE COVID-19 PANDEMIC
Pictured: Co-authors
Michael N. Bergman, principle and founder, and;
Rachel Renaud, student-at-law.
The COVID-19 pandemic is an unprecedented global event. Neither war nor natural catastrophe has ever impacted airline travel in the same manner that the COVID-19 related travel bans have. While a copious number of flights have been and continue to be cancelled in light of the pandemic, many continue to fly with few or no passengers. Many fliers have been left wondering what their rights to compensation are; specifically to refunds. This article will detail the rights of passengers holding tickets for flights bound to or from the United States (US), Canada and the European Union (EU) whose flight was cancelled by their carrier, or who opted to cancel their tickets themselves as a result of the COVID-19 pandemic. It will provide particular focus on compensation for ticket holders of cancelled Canadian domestic flights, whose rights to refunds has been called into question.
As a general note, fliers should note that tickets eligible for refunds will be refunded at their point of purchase. Therefore, third party points of sale such as travel agencies and online sites such as Expedia, Travelocity, Kayak and others are responsible for processing their customers’ refunds. The majority of these third parties have decided to issue flight refunds according to the issuing airline’s refund criteria. Therefore, those refunds will be issued in the same manner as those purchased directly from a carrier. Tickets purchased directly from the carrier will be refunded by same.
The first step in determining a passenger’s right to refund for a cancelled flight is to examine the departure and arrival points.
For passengers arriving to or departing from Canada, it could be easier to claim compensation under U.S or E.U regulations, if their flight originated from or arrived in one of such places. Read on to find out why.
Compensation Regulations for flights to, from and within the USA which were cancelled:
The United States Department of Transportation (DOT) issued notice on April 3rd, 2020 stating that all carriers operating flights to, from or within the United States have a responsibility to issue refunds to those passengers whose flights are significantly delayed or cancelled. The full text of notice can be found here.
The DOT notice clearly states that “[t]he longstanding obligation of carriers to provide refunds for flights that carriers cancel or significantly delay does not cease when the flight disruptions are outside of the carrier’s control (e.g., a result of government restrictions)”[1].
The COVID-19 crisis does not absolve these carriers of their responsibility to refund customers.
For individuals which U.S regulation applies, the first step in filing a claim is to do so with their ticket’s carrier. If the carrier denies the claim, a complaint for compensation can be filed at the Aviation Consumer Protection Division (ACPD) here.
For flights to, from and within the European Union which were cancelled:
Similarly to the U.S, the E.U issued a notice on March 18th, 2020 reminding carriers that they must refund passengers for any segment of their itinerary that was not completed, and in the event of a cancellation, the entire amount of the ticket(s) of the flight(s). The full text of the notice is available here.
Ticket holders with a destination to or from the E.U who qualify for a refund should file a claim with their carrier first. If the carrier rejects their claim, a compensation claim may be filed using the steps found here.
What about individuals whose flights are not or were not cancelled, but who cho(o)se not to travel due to the travel bans?
The travel bans do not automatically entitle passengers to refunds in the event that they choose not to travel if their flight is still scheduled to go ahead. However, many carriers have opted to provide travel credits for use towards future travel within the next two years as an act of good faith.
For flights to, from and within Canada which were cancelled:
Canadian domestic flight passengers have had a more difficult time getting refunds than their U.S or E.U travelling counterparts. Ticket holders whose cancelled flight was set to depart from or arrive in the U.S or E.U who are seeking a refund but were only offered travel vouchers will likely have better luck disputing claims with U.S or E.U regulators than their Canadian counterparts, for reasons outlined below.
The reason being that the Air Passenger Protection Regulations (“APPR”) (the legislation which defines air passenger rights in Canada) correlates the carrier’s responsibility towards compensating their passengers with whether or not the cause of the delay and/or cancellation is considered to be within the carrier’s control. As demonstrated above, such is not the case in the U.S or E.U.
Typically speaking, if an airline operating in Canada cancels any or all segments of a passengers itinerary for reasons considered to be “within the airline's control” then they are obligated to provide a refund “by the method used for the original payment and to the person who purchased the ticket or additional service”[2]. Examples of such situations are “staff issues, aircraft preparation activities, and decisions to consolidate flights because of low demand… [and] disruptions due to routine and scheduled maintenance (including any work to address issues found during that maintenance)”[3].
However, these airlines are not obligated to refund customers for flights cancelled due to circumstances “within the airline's control, but required for safety” or “outside the airline's control”. Within the airline’s control, but required for safety is described as delays "required by law to reduce risk to passengers"[4] such as cancellations or delays required for airlines to follow the Canadian Aviation Regulations. Circumstances outside the airline’s control can be, for example, “security incidents, medical emergencies, bad weather, or orders from applicable authorities”[5]. In the event of either of these categories, carriers are not required to provide a refund for cancellations, but rather provide travel credits and rebook passengers.
So, that leaves a question for regulators and airline carriers to answer: Is the COVID-19 crisis outside a carrier’s control, especially considering that many airlines are still flying (even if they do so empty or with few passengers)?
As of right now, the answer isn’t clear.
Canadian airlines have taken the position that the COVID-19 crisis is not within their control, and therefore they should not have to issue refunds for cancellations. Most are offering travel vouchers instead, for a future flight experience equivalent to the one purchased, redeemable within the next two years. However, consumer rights groups and individuals alike are saying that this is not enough, particularly due to the constantly fluctuating nature of ticket prices. Many customers risk over paying for future flights in the event that ticket prices decrease. Furthermore, vouchers remove a customer’s ability to compare various airlines offers for the best price.
Are travel vouchers enough? Canadian regulators haven’t been clear on their stance. The Canadian Transport Authority (“CTA”)- the government body responsible for enforcing the APPR- originally issued a post titled “Statement on Vouchers” on March 25th, 2020 which reads : “[w]hile any specific situation brought before the CTA will be examined on its merits, the CTA believes that, generally speaking, an appropriate approach in the current context could be for airlines to provide affected passengers with vouchers or credits for future travel, as long as these vouchers or credits do not expire in an unreasonably short period of time (24 months would be considered reasonable in most cases)”[6].
This statement has caused controversy as it leaves out a crucial piece of information- that travellers who have been denied a refund can file a complaint demanding one; given that the determination of whether or not COVID-19 is within a carriers control is not clear. Furthermore, Canadian contractual case law is on the side of passengers. Previous cases have found that airlines have a responsibility to refund passengers for cancelled flights, even if the airline feels the reason for cancellation is not within their control.
Furthermore, the Canadian common law doctrine of “frustrated” contracts may apply. This doctrine applies when an unforeseeable circumstance renders it impossible for either party to complete the terms stipulated in a contract. Given that the purchase of an airline ticket is considered to be a contract between the purchaser and the airline to provide a service, the airline could be liable to provide a refund for the services they cannot render. It remains to be seen whether or not this doctrine will be applied in the Canadian courts in response to the COVID-19 pandemic.
Given the lack of clarity on the situation, the Air Passenger Rights advocacy group recently launched a legal action in the Federal Court of Appeal seeking to have the statement on vouchers removed from CTA’s website, so as to not discourage people from seeking refunds.
The CTA later attempted to clarify their statement, stating “[t]he statement on vouchers suggests what could be an appropriate approach in extraordinary circumstances, but doesn’t affect airlines’ obligations or passengers’ rights,” but this still leaves passengers in a grey area.
So where does this leave disgruntled airline passengers looking for a refund?
We have yet to see. Passengers who qualify for a refund and requested one from their airline but were instead provided with travel credit can file a complaint on the CTA website here. However, the CTA has temporarily suspended all dispute resolution activities involving air carriers until June 30, 2020, with the possibility of extending the suspension. Therefore, passengers should not expect a swift reply.
For those who have purchased their tickets on a credit card, some may be able to request a refund through the financial institution who issues their credit card. However, most credit card issuers require that the client first request a refund through their airline carrier. Though, notably, most financial institutions in Canada have not been leaping to provide refunds on airline tickets.
The content of this article is not legal advice or a legal opinion and is intended to provide general information on the subject matter. For more information about your specific circumstance, please contact us at 514-842-9994 or email us at mnb@bergmanlawyers.com. You should always consult a lawyer concerning any legal matter.
Bergman & Associates provides a diversified practice, which encompasses the spectrum of corporate, transactional, litigation and regulatory matters. © 2020 by Bergman & Associates. All rights reserved.
[1] Enforcement Notice Regarding Refunds by Carriers Given the Unprecedented Impact of the COVID-19 Public Health Emergency on Air Travel, § (2020). https://www.transportation.gov/sites/dot.gov/files/2020-04/Enforcement Notice Final April 3 2020.pdf.
[2] “Flight Delays and Cancellations: A Guide.” Flight Delays and Cancellations: A Guide | Canadian Transportation Agency, December 9, 2019. https://otc-cta.gc.ca/eng/flight-delays-and-cancellations-a-guide.
[3] Ibid.
[4] Ibid.
[5] Ibid
[6] “Statement on Vouchers.” Canadian Transportation Agency, March 25, 2020. https://otc-cta.gc.ca/eng/statement-vouchers.