Air Canada, WestJet launch legal battles to overturn orders to compensate passengers for cancelled flights

Airlines say transport regulator misinterpreted the rules when ordering them to pay up in 2 separate cases

Sophia Harris – CBC News

Air Canada and WestJet have set out to appeal separate Canadian Transportation Agency decisions involving compensation awarded to passengers for flight cancellations caused by crew shortages. (Andrew Vaughan/The Canadian Press)

The fight over compensation claims for cancelled and delayed flights has made its way into the Federal Court of Appeal.

Air Canada and WestJet have both launched a legal battle to appeal separate Canadian Transportation Agency (CTA) rulings where, in each case, the airline was ordered to compensate one or more passengers $1,000 for a cancelled flight caused by a staffing shortage.

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The airlines each allege in court documents that they shouldn’t have to pay, because the CTA — Canada’s transport regulator and a quasi-judicial tribunal — misinterpreted Canada’s compensation regulations.

Consumer advocate and lawyer John Lawford said if the airlines win their appeals, it could affect other compensation claims for flight disruptions.

“Basically anytime the airline has a staffing shortage of any kind that could be … an event that’s out of their control and therefore all those claims would fail,” said Lawford, executive director of the Public Interest Advocacy Centre (PIAC). “I think that these appeals … signal that they, the airlines, are very resistant to paying compensation.”

John Lawford, executive director of the Public Interest Advocacy Centre, says if WestJet and Air Canada are successful in appealing recent Canadian Transportation Agency rulings, it could affect other compensation claims. (Christian Patry/CBC)

WestJet and Air Canada told CBC News they abide by Canada’s Air Passenger Protections Regulations (APPR). WestJet said it has launched its appeal to ensure the rules are fairly applied.

“There is no one-size-fits-all crew issue and we believe that’s what the CTA is trying to do, is to make all crew issues the same,” said Andy Gibbons, WestJet’s vice-president of government relations.

WestJet ordered to pay $1,000

Under the APPR, airlines only have to pay compensation — up to $1,000 — if a flight delay or cancellation is within an airline’s control and not required for safety reasons.

The CTA said it has received more than 16,000 air passenger complaints involving flight disruptions since May.

The CTA’s rulings on the WestJet and Air Canada cases, which were published this past summer, were supposed to help clear the air on compensation rules for flight disruptions caused by crew shortages.

The agency clarified that staffing problems are considered within the airline’s control and can’t be classified as a safety issue, unless an airline can prove otherwise.

The WestJet case involved passenger Owen Lareau, whose flight in July 2021 from Regina back home to Ottawa was cancelled, causing a 21 hour delay.

According to the CTA, WestJet argued that a pilot had called in sick about an hour before take-off and a replacement couldn’t be found in time, so the flight cancellation was a safety issue which doesn’t warrant compensation.

But the CTA determined that WestJet “did not sufficiently establish” that the flight cancellation was unavoidable, so it ordered the airline to compensate Lareau $1,000.

Andy Gibbons, WestJet’s vice-president of government relations, says the Canadian Transportation Agency shouldn’t punish airlines for cancelling flights for safety reasons. (CBC)

WestJet requested permission to appeal the ruling in August and was granted approval by the Federal Court of Appeal last month.

“Fundamentally, we believe that it was a safety decision to cancel this flight and we stand by that,” said WestJet’s Gibbons. “The original purpose of the APPR was to protect consumers from commercial decisions of airlines, not to punish airlines for safety decisions.”

Gibbons also suggested airfares could rise if the CTA continues to generalize crew shortages as within an airline’s control.

“We have an obligation to keep our costs low and that has to be balanced with the fairness of the compensation regimes that are in place.”

The CTA and the passengers involved in both cases declined to comment while the matters are before the courts.

Air Canada ordered to pay $2,000

In the Air Canada case, passenger Lisa Crawford and her son were delayed by almost 16 hours after the airline cancelled their August 2021 flight from their home in Fort St. John, B.C., to Halifax.

According to the CTA, Air Canada argued that a pilot was unable to complete a required training course in time, and the airline couldn’t secure a replacement, so the flight cancellation was outside its control.

But the CTA determined that Air Canada failed to provide evidence “establishing that the crew shortage was unavoidable despite proper planning,” so Crawford and her son must be compensated $1,000 each.

Air Canada requested permission from the courts last month to appeal the ruling and is waiting for approval.

WATCH | Air Canada, WestJet fight customer compensation decisions: 

Both WestJet and Air Canada launch legal battles to appeal recent decisions ordering them to compensate passengers. Experts say if the airlines are successful, it could impact other claims.  2:11

In its motion for an appeal, the airline argues the CTA can’t presume crew shortages are within the airlines’ control and then put the onus on them to disprove it.

“It has interpreted the APPR in a way unintended by the act, placing an unattainable burden of proof upon carriers,” said Air Canada spokesperson, Peter Fitzpatrick in an email.

WestJet makes a similar legal argument in its motion for an appeal.

PIAC’s Lawford suggests the CTA’s request for proof was fair.

“It’s a reasonable proposition for a regulator to say we expect you to have plans for staff shortages,” he said. “The agency was just asking them to provide some evidence that they made an effort.”

Another appeal

Canada’s Air Passenger Protection Regulations are also the subject of another court battle.

In 2019, Air Canada and Porter Airlines, along with more than a dozen applicants, including the International Air Transport Association, filed a motion in the Federal Court of Appeal to quash many of the regulations.

The applicants argue the APPR is “invalid” for international flights because it differs from the Montreal Convention, a treaty adopted by many countries — including Canada — which establishes airline liability for flight disruptions.

Under the Montreal Convention, air passengers can only get compensation for flight disruptions if they prove they suffered a financial loss.

A decision in that case is expected soon.

Lawford said if all the appeals are successful, it could mean few flight disruptions warrant compensation.

“It would certainly be a fight for the average consumer to get their claim accepted.”