Decision No. 111-C-A-2015

INTRODUCTION

[1] John Williams filed an application with the Canadian Transportation Agency (Agency) on behalf of himself and Rosemary Williams (applicants) against Air Canada. The applicants were scheduled to travel from Ottawa, Ontario, Canada to Vienna, Austria, via Montréal, Quebec, Canada and London, United Kingdom on February 11 to 12, 2014; however, they were delayed at their connecting point in Montréal, and as a result they missed their flight to London. The applicants allege that Air Canada’s tariff is unreasonable because it is unfair, and are of the view that they should have received the same compensation as if they had been in a situation of overbooking. As a remedy, the applicants request that the Agency suspend or disallow Air Canada’s terms or conditions of carriage and substitute other terms or conditions in their place.

ISSUE

[2] Is Rule 80, Schedule Irregularities, of Air Canada’s International Passenger Rules and Fares Tariff, NTA(A) No. 458 (Tariff) reasonable within the meaning of subsection 111(1) of the Air Transportation Regulations, SOR/88-58, as amended (ATR)?

RELEVANT TARIFF EXTRACTS

[3] The applicable tariff extracts relevant to this matter are set out in the Appendix.

REASONABLENESS OF TARIFF PROVISIONS

[4] Subsection 111(1) of the ATR requires that, with respect to international flights, a carrier’s tariff be just and reasonable. Subsection 111(1) states that:

All tolls and terms and conditions of carriage, including free and reduced rate transportation, that are established by an air carrier shall be just and reasonable and shall, under substantially similar circumstances and conditions and with respect to all traffic of the same description, be applied equally to all that traffic.

LEGISLATIVE CONTEXT

[5] The Agency has stated in previous decisions, such as in 10-C-A-2014">Decision No. 10-C-A-2014, that in order to determine whether a term or condition of carriage applied by a carrier is “reasonable” within the meaning of subsection 111(1) of the ATR, a balance must be struck between the rights of passengers to be subject to reasonable terms and conditions of carriage and the particular air carrier’s statutory, commercial and operational obligations.

[6] The terms and conditions of carriage are set by an air carrier unilaterally without any input from passengers. The air carrier establishes its terms and conditions of carriage in the carrier’s own interests, which may have their basis in purely commercial requirements. There is no presumption that a tariff is reasonable.

[7] When balancing the passengers’ rights against the carrier’s obligations, the Agency must consider the whole of the evidence and the submissions presented by both parties, and make a determination on the reasonableness or unreasonableness of the term or condition of carriage based on which party has presented the more compelling and persuasive case.

POSITIONS OF THE PARTIES

[8] The applicants submit that they were delayed by almost 24 hours before catching their replacement flight, which caused them to miss a family celebration. Furthermore, they experienced significant inconvenience as a result of the delay. They advise that Air Canada offered no compensation, other than arranging hotel accommodation and providing partial meal payments, and simply rebooked them to travel on the next day.

[9] The applicants submit that Air Canada offers $800 to passengers who have been “bumped” from the flight on which they hold a ticket due to overbooking. They acknowledge that they were not subject to an oversell situation. According to the applicants, their experience was far worse than it would have been had this been related to overselling. They also point out that they received no compensation. The applicants maintain that Air Canada’s terms and conditions relating to this matter are therefore unreasonable as they are unfair.

[10] Air Canada submits that the applicants experienced a missed connection because of the late arrival of their flight from Ottawa, and they were not subject to denied boarding. Air Canada asserts that it fulfilled its obligations relating to schedule irregularities as set out in Air Canada’s Tariff Rule 80 because it:

• accommodated the applicants on flights to their final destination operated by Air Canada and a carrier with which Air Canada has an agreement;
• provided the applicants with meal and hotel accommodation vouchers to cover the expenses associated with the delayed arrival of the applicants’ flight and their subsequent missed connection.

[11] The applicants state that the Agency has already determined that Air Canada did not violate Rule 80, Schedule Irregularities of its Tariff. The applicants reiterate that Air Canada’s terms and conditions of carriage are unreasonable because they are unfair.

[12] The applicants also state that they understand from news reports that Air Canada’s overbooking compensation regime compares unfavourably with regimes in the United States of America and Europe, and that this provides further evidence that Air Canada’s terms and conditions of carriage are unreasonable. They submit that the Agency should suspend or disallow Air Canada’s terms and conditions of carriage, and substitute in their place other terms and conditions.

ANALYSIS AND FINDINGS

[13] The applicants allege that they were delayed by almost 24 hours before catching their replacement flight. Air Canada states that “[d]ue to the delay [….] they were not able to make their connection”. Based on the foregoing, the Agency finds that this application relates to a delay, and that the applicable tariff provision is Rule 80, Schedule Irregularities.

[14] This is not a case of a delay caused by Air Canada overselling the flight. The delay was caused by the malfunction of the jet bridge, a circumstance that is beyond Air Canada’s control as it is part of the airport’s infrastructure. Instead, the applicants’ position is that Rule 80, Schedule Irregularities of Air Canada’s Tariff is unreasonable given that they received no compensation for their experience, even though the impact on them of the delay was far worse than had the delay resulted from being “bumped” from a flight that was oversold by Air Canada, for which Air Canada offers compensation.

[15] The Agency does not accept that Air Canada’s Rule 80, Schedule Irregularities, is unreasonable by virtue of it not providing the same compensation in the present circumstances as would have been provided in the event of a delay caused by overselling. There is a very real difference between the two situations. In the case of a delay caused by overselling, the carrier makes a business decision that addresses the possibility that, without an overselling practice, it risks having its flights operated with some empty seats that could otherwise be filled. While the Agency has found that the practice of overselling is not unreasonable, it has also found that an air carrier must provide compensation to passengers who experience a delay due to being “bumped” from their flight.

[16] The Agency is of the opinion that the fact that the applicants missed their connection due to a delay caused not by Air Canada’s business decision, but by circumstances beyond Air Canada’s control, is significant. The compensation provided in circumstances of a delay caused by overselling should not be available in the present circumstances. The fact that Air Canada’s Tariff provides differently than it does in the event of a delay caused by overselling is not unreasonable.

[17] The Agency also notes that Article 19 of the Convention for the Unification of Certain Rules for International Carriage by Air – Montreal Convention (Convention) provides that:

The carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo. Nevertheless, the carrier shall not be liable for damage occasioned by delay if it proves that it and its servants and agents took all measures that could reasonably be required to avoid the damage or that it was impossible for it or them to take such measures.

[18] Thus, an air carrier is required to provide compensation to passengers who have experienced delay. That obligation is subject to limits provided for in Article 22 of the Convention. Furthermore, it is also subject to the condition that the carrier took “[…] all measures that could reasonably be required to avoid the damage […].”

[19] In this case, the delay was caused by the malfunction of the jet bridge, a circumstance that is beyond Air Canada’s control as it is part of the airport’s infrastructure.

[20] Therefore, in this case, Air Canada’s Rule 80, Schedule Irregularities, is not unreasonable by virtue of it not providing compensation in such circumstances.

[21] With respect to the applicants’ submission that Air Canada’s overbooking compensation regime compares unfavourably with regimes in the United States of America and Europe, this matter relates to a delay caused by a missed connection, not overbooking. The Agency fails to see the relevance of this argument.

[22] Based on the above, the Agency finds that the applicants have failed to establish that Air Canada’s terms and conditions of carriage set out in Rule 80, Schedule Irregularities, of Air Canada’s Tariff are unreasonable because such terms and conditions do not strike a balance between the rights of passengers to be subject to reasonable terms and conditions of carriage and Air Canada’s statutory, commercial and operational obligations.

CONCLUSION

[23] The Agency dismisses the application.

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APPENDIX TO DECISION NO. 111-C-A-2015

Air Canada’s International Passenger Rules and Fares Tariff NTA (A) No. 458

Rule 80 Schedule irregularities

(A) General

(1)

Schedules not guaranteed

Times and aircraft type shown in timetables or elsewhere are approximate and not guaranteed, and form no part of the contract of carriage. Schedules are subject to change without notice. No employee, agent or representative of carrier is authorized to bind carrier by any statements or representation as to the dates or times of departure or arrival, or of the operation of any flight. It is always recommended that the passenger ascertain the flight’s status and departure time either by registering for updates on their electronic device, via the carrier’s Web site or by referring to airport terminal displays.

(2) Carrier not responsible

Carrier assumes no responsibility for passenger making connections not included as part of the itinerary set out in the ticket. Carrier is not responsible for changes, errors or omissions either in timetables or other representations of schedules. Carrier is not responsible for non‑compensatory or unforeseeable damages caused by delay, such as damages resulting from passenger’s purpose of travel or personal schedule at arrival. The carrier will not guarantee and will not be held liable for cancellations or changes to flight times that appear on passengers’ tickets due to force majeure, including labour disruptions or strikes. However, a passenger may invoke the provisions of the Convention regarding liability in the case of delay.

(3) Best efforts

Carrier undertakes to use its best efforts to carry the passenger and baggage with reasonable dispatch, but no particular time is fixed for the commencement or completion of carriage. Subject thereto carrier may, without notice, substitute alternate carriers or aircraft and may alter the route, add stopovers or omit the stopping places shown on the face of the ticket in case of necessity.

[…]

(C) Schedule irregularity

(1) Definition

Schedule irregularity means any of the following:

(a) Delay in scheduled departure or arrival of a carrier’s flight

(b) Flight cancellation, omission of a scheduled stop, or any other delay or interruption in the scheduled operation of a carrier’s flight, or

(c) Substitution of equipment or of a different class of service, or

(d) Schedule changes which require rerouting of passenger at departure time of the original flight.

[. . .]

(3) Given that passengers have a right to information on flight times and schedule changes, Air Canada will make reasonable efforts to inform passengers of delay, cancellations and scheduled changes and to the extent possible, the reason for the delay or change.

(4) In the event of a schedule irregularity, carrier will either:

(NOTE: Additional services are provided to On My Way customers, as detailed below):

(a)

carry the passenger on another of its passenger aircraft or class of service on which space is available without additional charge regardless of the class of service; or, at carrier’s option;

(b)

endorse to another air carrier with which Air Canada has an agreement for such transportation, the unused portion of the ticket for purposes of rerouting; or at carrier’s option;

(c)

reroute the passenger to the destination named on the ticket or applicable portion thereof by its own or other transportation services; and if the fare for the revised routing or class of service is higher than the refund value of the ticket or applicable portion thereof as determined from Rule 100, carrier will require no additional payment from the passenger but will refund the difference if it is lower or,

(d)

if the passenger chooses to no longer travel or if carrier is unable to perform the option stated in 1(a), (b) or (c) above within a reasonable amount of time, make involuntary refund in accordance with Rule 100 or,

(e)

upon request, for cancellations within Air Canada’s control, return passenger to point of origin and refund in accordance with Rule 100 as if no portion of the trip had been made (irrespective of applicable fare rules), or subject to passenger’s agreement, offer a travel voucher for future travel in the same amount; or, upon passenger request.