Air Canada Wants $2.5 Million Passenger Refund DOT Fine Dropped

In the middle of June, Simple Flying reported that the United States Department of Transportation (DOT) is seeking to fine Air Canada over $25.5 million due to its failure to provide refunds in a timely manner. The flag carrier of Canada is now defending this heavy penalty, sharing details of the situation in a 46-page letter to the United States’ transport authority.

Air Canada New York
The pandemic forced several cancellations and amendments, forcing airlines to dish out refunds and vouchers over the last year and a half. Photo: Getty Images

Frustration across the board

More than 6,000 passengers complained that Air Canada canceled or massively amended flights while refusing to give refunds. However, the DOT mandates refunds for passengers in specific circumstances. Thus, the DOT filed a formal complaint to the operator.

Air Canada had 15 days to respond to the complaint, which it now has. Notably, in the lengthy document, the company expresses that the DOT hasn’t alleged specific facts and didn’t establish that Air Canada’s policy of offering flight vouchers is unfair practice.

The firm adds that its contractual refund policy is both fair and entirely consistent with its “General Terms and Conditions of Carriage (“Conditions of Carriage”) and International Tariff (“Tariff”)” that govern the contractual relationship between it and its customers.

The airline shares that as the pandemic grew and started to affect operations in North America, the carrier was forced to amend its services and policies based on the ever-changing conditions. Despite the restrictions in place, Air Canada states that it responded in a manner that complies with all related CTA and DOT regulations.

Air Canada
Air Canada claims that its refund policy complied with all DOT and CTA regulations at the time. Photo: Getty Images

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The offerings

Air Canada adds that it also adhered to US and Canadian health and safety requirements. Altogether, the airline had to cancel numerous transborder services and refocused its attention on repatriation operations.

“Throughout the pandemic, Air Canada’s Contractual Refund Policy, which complied with the terms of its Conditions of Carriage and Tariff, applicable fare rules, and DOT and CTA regulations, uniformly provided customers whose non-refundable flight reservations were cancelled by Air Canada on or after March 19, 2020 due to government restrictions caused by COVID-19, with flight vouchers,” Air Canada shares in the document.

“Specifically, Air Canada offered its customers a number of refund options (collectively referred to as “AC Refunds”) to choose from based on their individual situations and needs. The first option was a full refund in the form of a travel credit. Initially after the pandemic hit, Air Canada provided flight travel credits (“FTCs”) which lasted for two years and were similar to vouchers offered by most other carriers.”

After the middle of the summer, the airline began offering Air Canada Travel Vouchers (“ACTVs”). It calls these cash equivalent products that do not expire and are reusable. They are also transferrable without restriction. Air Canada adds these vouchers can be transferred for cash or any other lawful consideration to any other person “for use without restriction.” They can also be used for travel on flights served by one of the carrier’s codeshare partners.

Air Canada
The airline highlights that that passenger had a choice to book a refundable or non-refundable ticket, and could have avoided issues if they chose the former. Photo: Getty Images

Troubles across the industry

The carrier recently extended its refund policy, allowing those that made bookings before April 13th, 2021, for travel on or after February 1st, 2020, to submit their refund requests if they did not fly for any reason.

The airline is by far the not only airline facing scrutiny amid its refund processes since the rise of the pandemic. The company, along with compatriots WestJet Airlines, Swoop, Sunwing Airlines, and Air Transat, had been facing court action since last fall. Sunwing Airlines will now borrow $100 million from the government to provide refunds. Across the nations, the likes of Air New Zealand, United Airlines, Virgin Atlantic, and Ryanair faced criticism over the last year or so.

Transport Canada, Boeing 737 MAX, Recertified
Air Canada and WestJet are planning to fly their Boeing 737 MAX aircraft to London. Photo: Getty Images

Overall, Air Canada requests that its “Motion to Dismiss” is granted. It wants the DOT complaint to be dismissed due to the reasons provided in its letter.

Simple Flying reached out to Air Canada for comment on the fine. We will update the article with any further announcements from the airline.

What are your thoughts about Air Canada’s DOT fine? What do you make of the airline’s defense? Let us know what you think of the overall situation in the comment section.