Decision No. 201-C-A-2005

April 8, 2005

File No. M4370/L150/03-01

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COMPLAINT

[1] On April 14, 2003, Irwin Nathanson filed with the Air Travel Complaints Commissioner (hereinafter the ATCC) the complaint set out in the title.

[2] On August 12, 2004, the complaint was referred to the Canadian Transportation Agency (hereinafter the Agency) for consideration as the complaint raised a tariff issue that falls within the jurisdiction of the Agency.

[3] On September 1, 2004, Agency staff advised the parties of the Agency's jurisdiction in this matter and sought Mr. Nathanson's confirmation whether he wished to pursue this matter formally before the Agency. As both parties had previously filed comments regarding Mr. Nathanson's complaint with the ATCC, Agency staff also requested the parties' confirmation as to whether they wished to have the comments they filed with the ATCC considered as pleadings before the Agency.

[4] On September 20, 2004, Mr. Nathanson advised the Agency that he wished to pursue the matter formally before the Agency, and to have the Agency consider the comments he filed with the ATCC as pleadings before the Agency.

[5] On October 5, 2004, Grupo TACA, on behalf of Lineas Aereas Costarricenses S.A. carrying on business as LACSA (hereinafter LACSA), filed a submission respecting Mr. Nathanson's complaint and, on October 13, 2004, advised that it did not want the Agency to solely rely on the pleadings before the ATCC, but to also consider the submission dated October 5, 2004.

[6] On October 28, 2004, Mr. Nathanson responded to LACSA's submission dated October 5, 2004.

[7] In its Decision No. LET-A-66-2005 dated February 28, 2005, the Agency directed questions to LACSA regarding the application of its denied boarding policy in respect of Mr. Nathanson and his family. On March 17, 2005, LACSA filed its response.

[8] Pursuant to subsection 29(1) of the Canada Transportation Act, S.C., 1996, c. 10 (hereinafter the CTA), the Agency is required to make its decision no later than 120 days after the application is received unless the parties agree to an extension. In this case, the parties agreed to an extension of the deadline until April 8, 2005.

ISSUE

[9] The issue to be addressed is whether LACSA applied the terms and conditions of its tariff as required by subsection 110(4) of the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR).

POSITIONS OF THE PARTIES

[10] On March 23, 2003, Mr. Nathanson and his family arrived at the airport in Havana to check in for LACSA Flight No. 622 to Toronto, and were informed that the flight was oversold.

[11] Mr. Nathanson alleges that he informed the ticket agent that it was necessary that he and his family return to Toronto on March 23, 2003, so as to be able to board an Air Canada flight from Toronto to Vancouver the next morning, thereby allowing Mr. Nathanson to attend a business meeting at his office that day. According to Mr. Nathanson, the agent responded that there was nothing that could be done, other than placing Mr. Nathanson and his family on a LACSA flight to Toronto departing Havana on March 24, 2003.

[12] Mr. Nathanson submits that he and his family returned to their hotel and had someone contact air carriers departing from Varadero airport. Mr. Nathanson advises that he was eventually able to make reservations for himself and his family for an Air Transat A.T. Inc. carrying on business as Air Transat (hereinafter Air Transat) flight departing the night of March 23, 2003 from Varadero to Montréal, and a second flight with Air Canada from Montréal to Toronto, which would then allow Mr. Nathanson and his family to connect with their originally booked flight with Air Canada from Toronto to Vancouver.

[13] Mr. Nathanson requests a full refund of CAD$3,462 for the additional Air Transat and Air Canada tickets that he purchased for himself and his family to travel from Varadero to Montreal, and then from Montréal to Toronto.

[14] In its response, LACSA explains the industry practice of "overbooking", and states that, in general, this practice works to the advantage of both airlines and passengers because the air carriers are able to operate at maximum capacity, thus resulting in the lowest possible fares for consumers. LACSA submits that in situations where overbooking occurs, carrier staff handle affected passengers according to the carrier's over-sale procedures. LACSA notes that, although there was no requirement in its over-sale procedures to provide hotel, meals or any such courtesies, it did offer Mr. Nathanson and his family hotel accommodations.

[15] LACSA submits that it provided Mr. Nathanson with a travel voucher on May 13, 2003 worth 400$USD, which was not redeemable in cash, and which represents the compensation required by the United States Department of Transportation. LACSA also submits that on December 2, 2003, it offered additional compensation in the form of four travel vouchers for 100$USD for each member of the Nathanson family, or one travel voucher for 400$USD in the name of Mr. Nathanson. LACSA further states that, in February 2004, it refunded 810.16$USD to Mr. Nathanson for the unused portions of the four tickets belonging to Mr. Nathanson and his family. LACSA maintains that it respected its regulations in addressing this matter.

[16] Mr. Nathanson submits that he is not satisfied with the response from LACSA, and maintains that the requirements set by the United States Department of Transportation relating to compensation for overbooking are not applicable to his contract for return transportation between Canada and Cuba.

[17] By Decision No. LET-A-66-2005 dated February 28, 2005, the Agency requested that LACSA provide its comments as to why it appears that the carrier failed to respect its policy in respect of compensation for denial of boarding as a result of overbooking. The Agency noted that although the policy is not reflected in LACSA's International Passenger Rules Tariff No. WHG-1, NTA(A) No. 326, Airline Tariff Publishing Company, Agent (hereinafter the Tariff), it is nonetheless set out in a policy document applicable to travel between Canada and Cuba, a copy of which LACSA submitted to the Agency in relation to Mr. Nathanson's complaint. The Agency notes that as of the date of the present Decision, LACSA refuses to provide compensation to Mr. Nathanson.

ANALYSIS AND FINDINGS

[18] In making its findings, the Agency has considered all of the evidence submitted by the parties during the pleadings, and the Tariff, as filed with the Agency.

[19] The Agency's jurisdiction with respect to the application to the terms and conditions of tariffs is set out in subsection 110(4) and section 113.1 of the ATR.

[20] Subsection 110(4) of the ATR provides that:

110(4) Where a tariff is filed containing the date of publication and the effective date and is consistent with these Regulations and any orders of the Agency, the tolls and terms and conditions of carriage in the tariff shall, unless they are rejected, disallowed or suspended by the Agency or unless they are replaced by a new tariff, take effect on the date stated in the tariff, and the air carrier shall on and after that date charge the tolls and apply the terms and conditions of carriage specified in the tariff.

[21] Section 113.1 of the ATR states:

113.1 Where a licensee fails to apply the fares, rates, charges, terms or conditions of carriage applicable to the international service it offers that were set out in its tariffs, the Agency may

(a) direct the licensee to take corrective measures that the Agency considers appropriate; and

(b) direct the licensee to pay compensation for any expense incurred by a person adversely affected by the licensee's failure to apply the fares, rates, charges, terms or conditions of carriage applicable to the international service it offers that were set out in its tariffs.

[22] A review of the Tariff indicates that it does not include terms and conditions of carriage clearly stating LACSA's policy in respect of compensation for denial of boarding as a result of overbooking.

[23] With respect to the compensation requested by Mr. Nathanson for the Air Transat and Air Canada tickets that he purchased for himself and his family on March 23, 2003, the Agency notes that, on several occasions, staff acting on behalf of the ATCC requested that LACSA reconsider its apparent refusal to tender this compensation. Following the referral of this matter to the Agency, LACSA offered to issue Mr. Nathanson a new travel voucher for 800$USD, in exchange for the vouchers previously provided to Mr. Nathanson that have since expired.

[24] Based on the evidence, as well as the lack of any policy in LACSA's Tariff regarding denied boarding compensation, the Agency does not have the statutory authority to order the payment of compensation in this case. In light of the foregoing, the Agency finds that the compensation requested by Mr. Nathanson is a matter beyond its jurisdiction.

[25] In this regard, subparagraph 122(c)(iii) of the ATR and section 26 of the CTA, provide as follows:

122. Every tariff shall contain

(c) the terms and conditions of carriage, clearly stating the air carrier's policy in respect of at least the following matters, namely,

(iii) compensation for denial of boarding as a result of overbooking

26. The Agency may require a person to do or refrain from doing any thing that the person is or may be required to do or is prohibited from doing under any Act of Parliament that is administered in whole or in part by the Agency.

[26] The Agency notes that, in this case, as stated above, LACSA's Tariff does not set out its policy related to denied boarding compensation. Accordingly, the Agency finds that LACSA has contravened subparagraph 122(c)(iii) of the ATR. In this regard, LACSA should be aware that the Agency considers contraventions of provisions of the CTA or the ATR to be serious and will take appropriate punitive action should any such contraventions occur in the future.

[27] Further, it is important to note that the authority of the Agency in such situations is limited to requiring a carrier to amend its tariff so as to comply with subparagraph 122(c)(iii) of the ATR. The Agency cannot require a carrier to apply a policy if that policy is not reflected in its tariff.

CONCLUSION

[28] As the Agency has no jurisdiction in the matter, the Agency hereby dismisses Mr. Nathanson's complaint in respect of the request for compensation.

[29] In addition, in respect of the contravention of the ATR, the Agency, pursuant to section 26 of the CTA, hereby directs LACSA to, within thirty (30) days from the date of this Decision, file a revision to the Tariff with the Agency, which clearly states LACSA's policy in respect of compensation for denial of boarding as a result of overbooking for travel to and from Canada.