Regulations Amending the Air Passenger Protection Regulations Highlights

Introduction

The COVID-19 pandemic and subsequent collapse of global air travel revealed a gap in Canada's air passenger protection framework that affects passengers whose flights are delayed or cancelled due to situations outside the airline's control.

On December 18, 2020, the Minister of Transport issued a direction giving the Canadian Transportation Agency (CTA) the authority to establish an obligation for airlines to provide a refund when there is a flight cancellation, or a lengthy delay, for reasons outside of the airline's control that prevent it from ensuring that passengers complete their itinerary within a reasonable time.

The CTA developed the Regulations Amending the Air Passenger Protection Regulations (Regulations), which will establish new refund requirements, taking into account input received from the public, consumer rights organizations, and the airline industry during two rounds of consultations. The first round of consultations, which sought feedback from stakeholders on the specifics of the new requirements, began on December 21, 2020 and ended on March 1, 2021. The second round of consultations invited stakeholders from the public to comment on the pre-published regulations in Part I of the Canada Gazette, which began on July 2, 2021 and ended on October 1, 2021. The Regulations were published in Part II of the Canada Gazette on September 8, 2022. They will come into force on September 8, 2022.

In addition to establishing refund obligations consistent with the Minister's direction, amending the Air Passenger Protection Regulations (APPR) provided an opportunity for the CTA to make clarifications and correct minor errors in the existing provisions.

Overview of the new regulations

The refund requirements for flight delays and cancellations that are outside airline control were added to the APPR. That means that they will apply to all flights on or after September 8, 2022 to, from and within Canada, including connecting flights .

Changes to the refund requirements

Until September 8, 2022, under the APPR, when there is a flight delay of three hours or more or a cancellation that is outside their control, all airlines must rebook affected passengers, free of charge, on the next available flight operated by them or a partner airline. Furthermore, in cases where the flight disruption is within the airline’s control, the airline must provide a refund if an airline (large or small) offers alternate travel arrangements that do not meet the passenger’s needs.

After September 8, 2022, under the new requirements, if a delay of three hours or more or a cancellation is outside the airline’s control, and the airline cannot provide the passenger with a confirmed reservation on the next available flight operated by them or a partner airline leaving within 48 hours of the departure time on the passenger's original ticket, the airline will be required to, at the passenger's choice:

  • Provide a refund; or
  • Make alternate travel arrangements for the passenger, free of charge
    • Large airlines will have to rebook the passenger on the next available flight of any airline, including competitors.

Passengers will be free to change their decision and choose a refund at any time before being provided a confirmed reservation on an alternate flight.

Refund coverage

When a passenger chooses to receive a refund, the airline will be required to refund the unused portion of their ticket, including any unused add-on services paid for (such as preferred seat selection or additional checked luggage).

If the passenger is no longer at their point of origin, and their travel no longer serves a purpose, the airline will be required to refund the ticket, including any unused additional services, and book the passenger on a flight back to their point of origin, free of charge.

Method of refund

The Regulations will require that the airline issue all refunds provided under the APPR to the person who originally purchased the ticket, using that person's original payment method (for example, a return on the person's credit card).

The airline will be allowed to offer the refund in other forms as well (for example, vouchers or credits). However, they will only be allowed to provide a refund in another form if:

  • It does not expire;
  • The airline informs the person in writing of the value of the refund and their right to receive a refund in that amount by the original payment method; and
  • The person confirms in writing that they have been informed of their right to a refund by the original method of payment and instead have chosen the other form of refund.

Refund deadline

The Regulations will require airlines to provide all refunds under the APPR within 30 days, regardless of the method of payment used to purchase the ticket.

This timeline will begin as soon as the airline's obligation to provide a refund is triggered.

Coming into force

The Regulations will come into force on September 8, 2022. Airlines will be required to follow the obligations set out in the regulations as soon as they come into force and could be subject to administrative monetary penalties of up to $25,000 per incident for non-compliance. In the event of an air travel-related dispute that cannot be resolved directly by a passenger and an airline, the passenger can make a complaint to the CTA.

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