Decision No. 327-C-A-2013

INTRODUCTION

[1] On April 24, 2013, Gábor Lukács filed a complaint with the Canadian Transportation Agency (Agency) alleging that certain provisions appearing in Rule 5.2, Responsibility for Schedules and Operations, of Air Transat’s international tariff are:

1. inconsistent with the Convention for the Unification of Certain Rules for International Carriage by Air - Montreal Convention (Convention) because they represent a blanket exclusion from liability; and,
2. unreasonable because they fail to provide the same protection to passengers affected by flight advancements as that provided to passengers who are subject to flight delays.

[2] On May 21, 2013, Air Transat filed its answer, and Mr. Lukács filed his reply on May 27, 2013. In its answer, Air Transat proposed certain revisions to Rules 5.2, 21.2 and 21.3, Additional Passenger Service Commitments. On May 29, 2013, Air Transat filed a submission after pleadings had closed. On the same date, Mr. Lukács requested the Agency to either expunge Air Transat’s submission from the record, or alternatively, allow him to respond to that submission. On June 18, 2013, the Agency provided Mr. Lukács with the opportunity to respond to Air Transat’s submission, and on the same date, Mr. Lukács submitted his response.

PRELIMINARY MATTER

[3] On May 26, 2013, Mr. Lukács filed a motion, pursuant to paragraph 14(3)(b) and section 32 of the Canadian Transportation Agency General Rules, SOR/2005-35, requesting that the Agency expunge paragraphs 2 to 5 of Air Transat’s answer, and an e-mail attached thereto, as being irrelevant and prejudicial to him. He submits that the paragraphs at issue describe the communications that Air Transat had with him prior to his filing of the complaint, and involve an attack on him. He further submits that the e-mail attached to Air Transat’s answer, sent to him previously by the carrier, includes false and defamatory allegations, and is therefore scandalous.

[4] Air Transat maintains that, in error, it failed to include in the attachment to Air Transat’s answer the version of the e-mail which retracted statements regarding Mr. Lukács’ personal motives and previous employment.

[5] The issue before the Agency in this matter is whether certain existing and proposed tariff provisions are consistent with the Convention and are reasonable. Air Transat’s submissions respecting Air Transat’s interaction with Mr. Lukács and the motives that may underlie the filing of his complaint are irrelevant to the Agency’s consideration of the issue. As such, they have not been considered by the Agency in reaching its determinations.

[6] With respect to Mr. Lukács’ request that certain material be expunged from the record, as the Agency does not expunge its public record of irrelevant material, the motion of Mr. Lukács to expunge the record is denied.

ISSUES

Existing Rules 5.2(a) and (b)

[7] Are Existing Rules 5.2(a) and (b) inconsistent with the Convention, and not reasonable within the meaning of subsection 111(1) of the Air Transportation Regulations, SOR/88-58, as amended (ATR)?

Proposed Rules 5.2, 21.2 and 21.3

[8] Would Proposed Rules 5.2, 21.2 and 21.3 be considered not reasonable within the meaning of subsection 111(1) of the ATR if they were filed with the Agency?

RELEVANT STATUTORY AND TARIFF EXTRACTS

[9] The Existing and Proposed Rules and the statutory extracts relevant to this Decision are set out in the Appendix.

REASONABLENESS OF TARIFF PROVISIONS

[10] To assess whether a term or condition of carriage is “unreasonable”, the Agency has traditionally applied a balancing test, which requires that a balance be struck between the right of a passenger to be subject to reasonable terms and conditions of carriage, and the particular carrier’s statutory, commercial and operational obligations. This test was first established in Decision No. 666‑C‑A‑2001 (Anderson v. Air Canada) and was most recently applied in 227-C-A-2013">Decision Nos. 227-C-A-2013 (Lukács v. WestJet) and 264-C-A-2013">264-C-A-2013 (Azar v. Air Canada).

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

[12] When balancing the passenger’s 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.

EXISTING TARIFF RULES

Issue: Are Existing Rules 5.2(a) and (b) inconsistent with the Convention, and not reasonable within the meaning of subsection 111(1) of the ATR?

[13] Mr. Lukács submits that Article 19 of the Convention provides that a carrier can only exonerate itself from liability for a flight delay if the carrier demonstrates that it and its servants and agents took all reasonable steps necessary to avoid the delay. He submits that Existing Rules 5.2(a) and (b) are inconsistent with Article 19 as they purport to exonerate Air Transat from every and any liability associated with a failure to operate and/or failure to operate on schedule, and in particular, exempt Air Transat from any liability for out-of-pocket expenses incurred by passengers because of a flight delay.

[14] Mr. Lukács observes that the impugned tariff provisions are almost identical to tariff provisions applied by Porter Airlines Inc., which the Agency found in Decision No. 16-C-A-2013 (Lukács v. Porter Airlines Inc.) to be inconsistent with Article 19 of the Convention. He submits that, while Existing Rules 5.2(a) and (b) permit passengers to request a refund in the event of a change from a direct to a connecting service, they appear to be silent on the rights of passengers affected by flight advancements. Mr. Lukács maintains that the absence of any protection for passengers affected by flight advancements is unreasonable, and that Air Transat should be directed to provide the same protection to those passengers as that provided to passengers affected by flight delays.

Analysis and findings

[15] Mr. Lukács submits that the provisions at issue in Existing Rules 5.2(a) and (b) represent exemptions from liability relating to flight operations, and that those Rules are inconsistent with Article 19 of the Convention in that they fail to recognize that a carrier is liable for certain operations if it cannot demonstrate that it took all reasonable measures to avoid the damage or that it was impossible to take those measures. The Agency agrees with Mr. Lukács’ submission that Existing Rules 5.2(a) and (b) are inconsistent with the Convention. The Agency also agrees with Mr. Lukács’ assertion respecting protection afforded to passengers affected by flight advancements as, in the Agency’s opinion, such occurrences may impact as negatively on those passengers as is the case with passengers whose flight is delayed.

[16] In light of the foregoing, the Agency finds that the right of a passenger to be subject to reasonable terms and conditions of carriage outweighs Air Transat’s statutory, commercial and operational obligations, and that the provisions at issue are therefore not reasonable within the meaning of subsection 111(1) of the ATR.

PROPOSED TARIFF RULES

Issue: Would Proposed Rules 5.2, 21.2 and 21.3 be considered not reasonable within the meaning of subsection 111(1) of the ATR if they were filed with the Agency?

[17] Air Transat submits that the revisions to the tariff provisions at issue are consistent with the findings in Decision No. 16-C-A-2013, and provide undertakings to passengers, who have had their scheduled departure times advanced in certain circumstances that are similar to those in the event of overbooking, cancellation or delay.

[18] Mr. Lukács submits that the revisions proposed by Air Transat to Rules 5.2 and 21 address the issue raised in his complaint, with the exception of Proposed Rule 21(2)(i), which he asserts is excessively restrictive in protecting passengers affected by flight advancements. He states that he fails to understand the rationale for not protecting passengers whose flight is advanced by less than six hours, or who are notified more than 48 hours in advance.

[19] Mr. Lukács maintains that Proposed Rule 21(2)(i) does not take into account previous Agency decisions respecting Air Transat’s tariffs, notably, Decision Nos. LET-C-A-112-2003 and 212-C-A-2004">212‑C‑A-2004 (Lipson v. Air Transat). He asserts that passengers should be entitled to protection if their departure time is advanced by more than 45 minutes, irrespective of the length of advance notice that Air Transat provides, and that passengers should also be entitled to choose between alternative transportation and a refund.

[20] Air Transat submits that, contrary to Mr. Lukács’ submission, in Decision No. 212-C-A-2004 the Agency expressly accepted a provision in Air Transat’s tariff which provided that remedies were only available for scheduling irregularities, including advancements, of not less than six hours. Air Transat indicates that Mr. Lukács has failed to provide any facts or evidence that would militate in favour of the Agency reversing itself in this respect, as he has essentially requested.

[21] Mr. Lukács submits that he has difficulty understanding Air Transat’s assertion that he has misstated the Agency’s determination in Decision No. 212-C-A-2004, and quotes relevant text in that Decision to support his position.

[22] With respect to the substance and merits of his position, Mr. Lukács refers to submissions appearing in his reply dated May 27, 2013.

Analysis and findings

[23] Mr. Lukács submits that, with the exception of Proposed Rule 21(2)(i), Proposed Rules 5.2, 21.2 and 21.3 are reflective of the requirements of the Convention and previous Agency decisions.

[24] With respect to Proposed Rule 21(2)(i), Mr. Lukács maintains that it fails to provide protection to passengers affected by flight advancements, and it is not consistent with previous Agency decisions, including Decision No. 212-C-A-2004. He also submits that passengers should be entitled to protection if their departure time is advanced by more than 45 minutes, irrespective of the advance notice that Air Transat provides, and that affected passengers should be entitled to choose between alternative transportation and a refund.

[25] Air Transat argues that, contrary to Mr. Lukács’ submission regarding Decision No. 212‑C‑A‑2004, the Agency, in that Decision, expressly accepted an Air Transat tariff provision providing that remedies were only available for scheduling irregularities, including advancements, of not less than six hours.

[26] The Agency agrees with Mr. Lukács’ submission that with the exception of Proposed Rule 21(2)(i), Proposed Rules 5.2, 21.2 and 21.3 are reflective of the requirements of the Convention and previous Agency Decisions.

[27] The Agency also agrees with Mr. Lukács’ submission regarding Decision No. 212-C-A-2004. Contrary to Air Transat’s submission, the Agency, in that Decision, did not make any determinations relating to the advancement of flights of not less than six hours. The tariff provision at issue was solely related to advancements greater than the minimum period established for check-in, that is, 45 minutes prior to the scheduled departure of the flight.

[28] With regard to the matter of flight advancements, the Agency is of the opinion that such advancements may impact as negatively on those passengers as is the case with passengers whose flight is delayed, and that affected passengers should be able to avail themselves of the same remedies as those available to passengers whose flight is delayed. Therefore, the Agency finds that the absence of protection for all passengers affected by flight advancements fails to strike a balance between a passenger’s right to be subject to reasonable terms and conditions of carriage and Air Transat’s statutory, commercial and operational obligations. As such, Proposed Rule 21(2)(i) would not be considered reasonable within the meaning of subsection 111(1) of the ATR if it were included in the Tariff on file with the Agency.

CONCLUSION

[29] In light of the foregoing, the Agency concludes the following:

Existing Rules:

[30] The Agency has determined that Existing Rules 5.2(a) and (b) are not reasonable within the meaning of subsection 111(1) of the ATR.

Proposed Rules:

[31] The Agency has determined that, with the exception of Proposed Rule 21(2)(i), Proposed Rules 5.2, 21.2 and 21.3 are reasonable within the meaning of subsection 111(1) of the ATR.

ORDER

[32] The Agency, pursuant to paragraph 113(a) of the ATR, disallows Existing Rules 5.2(a) and (b).

[33] The Agency orders Air Transat, by no later than September 23, 2013, to file Proposed Rules 5.2, 21.2 and 21.3, with the exception of Proposed Rule 21(2)(i), and a revised Proposed Rule 21(2)(i) that conforms to the findings in this Decision.

[34] Pursuant to paragraph 28(1)(b) of the CTA, this Order shall come into force when Air Transat complies with the above, but no later than September 23 , 2013.

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Appendix

RELEVANT TARIFF EXTRACTS

Existing Rules 5.2(a) and (b)

RULE 5.2 – RESPONSIBILITY FOR SCHEDULES AND OPERATIONS

1. The Carrier will endeavor to transport passengers and baggage with reasonable dispatch. Times shown in schedules, scheduled contracts, tickets, air waybills or elsewhere are not guaranteed. Flight times are subject to change without notice. The Carrier assumes no responsibility for making connections.
2. Schedules are subject to change without notice. The Carrier is not responsible or liable for failure to make connections, or for failure to operate any flight according to schedule, or for a change to the schedule of any flight. However, where a routing modification subsequent to the purchase of travel results in a change from a direct service to a connecting service, the Carrier will, upon request by the passenger, provide a full refund of the unused portion of the fare paid. Under no circumstances shall the Carrier be liable for any special, incidental or consequential damages arising directly or indirectly from the foregoing (including the carriage of baggage) whether or not the Carrier had knowledge that such damages might be incurred. Notwithstanding, the Carrier will make reasonable efforts to inform passengers of delays and schedule changes and, to the extent possible, the reason for the delay or change.

Proposed Rules 5.2(a) and (b), and 21

RULE 5.2 – RESPONSIBILITY FOR SCHEDULES AND OPERATIONS

1. The Carrier will endeavor to transport passengers and baggage with reasonable dispatch. Times shown in schedules, scheduled contracts, tickets, air waybills or elsewhere are not guaranteed. Flight schedules are subject to change without notice. Notwithstanding, the Carrier will make reasonable efforts to inform passengers of delays and schedule changes and, to the extent possible, the reason for the delay or change.
2. Where a routing modification subsequent to the purchase of travel results in a change from a direct service to a connecting service, the Carrier will, upon request by the passenger, provide a full refund of the unused portion of the fare paid.

RULE 21 – ADDITONAL PASSENGER SERVICE COMMITMENTS

1. Given that passengers have a right to information on flight times and schedule changes, the Carrier will make reasonable efforts to inform passengers of delays and schedule changes and to the extent possible, the reason for the delay or change.
2. (i) Given that passengers have a right to take the flight they paid for, if the passenger’s journey is interrupted by a flight cancellation, overbooking or in the event that the originally scheduled departure time is advanced by more than six (hours) with less than 48 hours advance notice to the passenger, the Carrier will take into account all the circumstances of the case as known to it and will provide the passenger with the option of accepting one or more of the following remedial choices:

a) transportation to the passenger’s intended destination within a reasonable time at no additional cost;

b) return transportation to the passenger’s point of origin within a reasonable time at no additional cost;

c) where no reasonable transportation option is available and upon surrendering of the unused portion of the ticket, a cash amount or travel credit (at the passenger’s discretion) in an amount equal to the fare and charges paid will be refunded or provided as a credit where no portion of the ticket has been used. Where a portion of the ticket has been used, an amount equal to the lowest comparable one-way fare for the class of service paid for shall be refunded or provided as a credit in the event of a one-way booking/itinerary, and for roundtrip, circle trip or open jaw bookings/itineraries, an amount equal to fifty percent of the round-trip fare and charges for the class of service paid for, for the unused flight segment(s), shall be refunded or provided as a credit.

(ii) When determining the transportation service to be offered, the Carrier will consider:

a) available transportation services, including services offered by interline, code sharing and other affiliated partners and, if necessary, other non-affiliated carriers;

b) the circumstances of the passenger, as known to it, including any factors which impact upon the importance of timely arrival at destination.

(iii) Having taken all the known circumstances into consideration, the Carrier will take all measures that can reasonably be required to avoid or mitigate the damages caused by the overbooking, cancellation or flight departure time advancement. Where a passenger who accepts option (a) or option (b) or option (c) nevertheless incurs expense as a result of the overbooking, cancellation or flight departure, the Carrier will in addition offer a cash payment or travel credit, the choice of which will be at the passenger’s discretion.

(iv) When determining the amount of the offered cash payment or travel credit, the Carrier will consider all circumstances of the case, including any expenses which the passenger, acting reasonably, may have incurred as a result of the overbooking, cancellation or flight departure time advancement, as for example, costs incurred for accommodation, meals or additional transportation. The Carrier will set the amount of compensation offered with a view to reimbursing the passenger for all such reasonable expenses.

(v) The rights of a passenger against the Carrier in the event of overbooking or cancellation are, in most cases of international carriage, governed by an international convention known as the Montreal Convention, 1999. Article 19 of that Convention provides that an air carrier is liable for damage caused by delay in the carriage of passengers and goods unless it proves that it did everything it could be reasonably expected to do to avoid the damage. There are some exceptional cases of international carriage in which the rights of the passengers are not governed by an international convention. In such cases only, a court of competent jurisdiction can determine which system of laws must be consulted to determine what those rights are.

3. Given that passengers have a right to punctuality, the Carrier will do the following:

a) If a flight is delayed/advanced and the difference between the scheduled departure of the flight and the actual departure of the flight exceeds 4 hours, the Carrier will provide the passenger with a meal voucher;

b) If a flight is delayed/advanced by more than 8 hours and the delay/advancement involves an overnight stay, the Carrier will pay for an overnight hotel stay and airport transfers for passengers who did not start their travel at that airport;

c) If the passenger is already on the aircraft when a delay occurs, the Carrier will offer drinks and snacks if it is safe, practical and timely to do so. If the delay exceeds 90 minutes and the aircraft commander permits, the Carrier will offer passengers the option of disembarking from the aircraft until it is time to depart.

4. Given that passengers have a right to retrieve their luggage quickly, if the luggage does not arrive on the same flight as the passenger, the Carrier will take steps to deliver the luggage to the passenger’s residence/hotel as soon as possible. The Carrier will take steps to inform the passenger on the status of the luggage and will provide the passenger with an over-night kit as required. Compensation will be provided as per the provisions of this tariff.

5. Given that nothing in this tariff would make the Carrier responsible for acts of force majeure per Rule 5.3 or for the acts of third parties that are not deemed servants and/or agents of the Carrier per applicable law or international conventions, the Carrier will not be held responsible for inclement weather or for the actions of such third parties including governments, air traffic control service providers, airport authorities, security and law enforcement agencies, or border control management authorities.

6. In the event of a conflict between the provisions of this Rule and those of any other rule in this tariff, the provisions of this Rule shall prevail except with respect to Rule 5.3.

RELEVANT CONVENTION EXTRACT

Article 19 – Delay

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.

RELEVANT STATUTORY EXTRACTS

Air Transportation Regulations

111.(1) 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.

113. The Agency may

(a) suspend any tariff or portion of a tariff that appears not to conform with subsections 110(3) to (5) or section 111 or 112, or disallow any tariff or portion of a tariff that does not conform with any of those provisions; and [...]