Decision No. 33-C-A-2020

SUMMARY

[1] The applicant filed an application with the Canadian Transportation Agency (Agency) against Air Canada regarding a business class seat upgrade that he purchased for Flight No. AC8457, departing on March 18, 2019, from Boston, United States of America, to Montréal (Quebec).

[2] The applicant is seeking a refund for the additional USD 161 that he paid for the business class seat upgrade, and an apology from Air Canada.

[3] The Agency will consider the following issues:

• Did Air Canada properly apply the terms and conditions set out in its International Passenger Rules and Fares Tariff No. AC-2 Containing Local and Joint Rules, Regulations, Fares and Charges on Behalf of Air Canada Applicable to the Transportation of Passengers and Baggage Between Points in Canada/USA and Points in Areas 1/2/3 and Between the USA and Canada, NTA(A) No. 458 (Tariff), as required by subsection 110(4) of the ATR?
• If Air Canada did not properly apply the terms and conditions set out in its Tariff, what remedy, if any, should be ordered?

[4] For the reasons set out below, the Agency finds that the applicant has failed to prove, on a balance of probabilities, that Air Canada did not properly apply the terms and conditions of carriage set out in its Tariff. Accordingly, the Agency dismisses the application.

PRELIMINARY MATTER

[5] The applicant requests an apology from Air Canada. The Canada Transportation Act, S.C., 1996, c. 10, as amended (CTA) does not give the Agency the power to order apologies. Accordingly, and consistent with the Federal Court of Canada’s decision in Canada (Attorney General) v. Stevenson, 2003 FCT 341, the Agency does not have the jurisdiction to order the carrier to apologize to the applicant.

[6] In Order No. 2020-A-32, the Agency stayed dispute proceedings involving air carriers until April 30, 2020, due to the impact of the COVID-19 pandemic.

[7] In Order No. 2020-A-37, the Agency extended the stay until June 30, 2020.

[8] In this case, the Panel’s term as an Agency Member ends on May 31, 2020. Therefore, pursuant to subsection 5(2), paragraph 41(1)(d), and section 6 of the Canadian Transportation Agency Rules (Dispute Proceedings and Certain Rules Applicable to All Proceedings), SOR/2014-104, the Agency lifts the stay in the interests of justice.

THE LAW AND RELEVANT TARIFF PROVISIONS

[9] The relevant provisions of the ATR and Air Canada’s Tariff are set out in the Appendix.

POSITIONS OF THE PARTIES AND FINDINGS OF FACT

The applicant

[10] The applicant purchased an economy class ticket, via Expedia.ca, for Flight No. AC8457 departing on March 18, 2019, from Boston to Montréal.

[11] The applicant states that when he arrived at the airport on March 18, 2019, to check in for his flight, he was told by Air Canada staff at the check-in counter that the flight was oversold in economy class and that if he wanted to be guaranteed a seat on the flight, “he would have to pay for an upgrade to business class.” He adds that he was told that his other choices were to be rescheduled on another flight or to wait until the gate closed, at which time, if seats were available, he would be assigned a business class seat at no extra charge.

[12] The applicant states that because he had an important meeting to attend in Montréal later in the day, rescheduling his flight or taking a chance on seat availability after the gate closed were not acceptable options, so he felt that he had no choice but to pay for the upgrade. The applicant also states that, contrary to what Air Canada alleges, he was not told that ‘‘denied boarding levels are exceedingly low’’ and that ‘‘there is little reason to be concerned about [the] possibility of being denied boarding forcibly’’.

[13] The applicant argues that he should have been entitled to a seat on the aircraft without paying additional charges as he had a confirmed reservation and he checked in “at or prior to the required time”.

Air Canada

[14] Air Canada states that the flight was oversold and that the applicant purchased a standard fare ticket for which no seat was assigned to the applicant in advance. Air Canada submits that the applicant was advised at check-in that the economy class cabin was oversold and that it would be seeking volunteers at the gate who would be willing to travel later in exchange for compensation. Air Canada argues that as the applicant preferred not to wait or take any chance that he would be denied boarding, he chose to purchase a seat in business class, and that as this was the applicant’s decision, the upgrade fee is not refundable.

[15] Air Canada also states that both the concept of ‘‘overselling’’ and Air Canada’s denied boarding policy have previously been recognized by the Agency as reasonable. It states that, as per Rule 90 of its Tariff, “a passenger is considered to have been denied boarding when it was not possible to accommodate the passenger on the flight on which he held confirmed reservations and the flight must have departed without him”. Air Canada indicates that the applicant travelled on the flight in respect of which he held a confirmed reservation, and that therefore, he was not denied boarding pursuant to this Rule.

Findings of fact

[16] The parties agree that Flight No. AC8457 was oversold in economy class at the moment that the applicant arrived for check-in. The parties also agree that Air Canada later offered the applicant a refund with certain conditions, which he refused.

[17] The facts also demonstrate that Flight No. AC8457 did not depart without the applicant.

ANALYSIS AND DETERMINATIONS

[18] The onus is on the applicant to prove, on a balance of probabilities, that the carrier has failed to properly apply the terms and conditions of carriage set out in the tariff.

[19] Rule 10 of Air Canada’s Tariff provides that the carrier does not guarantee any type of space on the aircraft.

[20] Rule 90(A) of the Tariff provides that denied boarding occurs when the carrier is unable to provide previously confirmed space due to there being more passengers holding confirmed reservations than for which there are available seats on the flight. According to Rule 90(D)(1)(b) of the Tariff, a passenger is considered to have been denied boarding if Air Canada was not able to accommodate them on the flight on which they held confirmed reservations subject to completing the denied boarding process provided for in Rule 90(B) and (C) of the Tariff, and if the flight departed without them. The Agency notes that, consistent with Rule 90(E) of the Tariff, a passenger who has been denied boarding pursuant to Rule 90(D) of the Tariff would be entitled to the compensation.

[21] In paragraph 15 of Decision No. 111-C-A-2015 (Williams and Williams v. Air Canada), the Agency found that:

…. 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.

[22] When Air Canada told the applicant that the flight was oversold, it offered him various options, including booking him on the next available flight or waiting until the gate closed, at which time, if seats were available, he would be assigned a business class seat at no extra charge.

[23] The Agency finds that the applicant chose to upgrade his ticket at check-in instead of going through the denied boarding process provided for in Rule 90(B), (C) and (D) of Air Canada’s Tariff. Moreover, Air Canada transported him on Flight No. AC8457. As such, this was not a case of denied boarding, as defined in Rule 90 of the Tariff.

[24] Based on the above, the Agency finds that the applicant has failed to prove, on a balance of probabilities, that Air Canada did not properly apply the terms and conditions of carriage set out in its Tariff. As a result, the applicant is not entitled to compensation.

[25] Along with the issuance of this Decision, the Agency encourages Air Canada to reinstate its offer to reimburse the applicant for the upgrade fee of USD 161 should the applicant wish to reconsider it.

CONCLUSION

[26] The Agency dismisses the application.

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APPENDIX TO DECISION NO. 33-C-A-2020

Air Transportation Regulations, SOR/88-58, as amended (ATR)

Subsection 110(4) of the ATR requires that an air carrier operating an international service apply the terms and conditions of carriage set out in its tariff.

Section 113.1 of the ATR states the following:

If an air carrier that offers an international service fails to apply the fares, rates, charges or terms and conditions of carriage set out in the tariff that applies to that service, the Agency may direct it to

a) take the corrective measures that the Agency considers appropriate; and

b) pay compensation for any expense incurred by a person adversely affected by its failure to apply the fares, rates, charges or terms and conditions set out in the tariff.

Air Canada’s International Passenger Rules and Fares Tariff No. AC-2 Containing Local and Joint Rules, Regulations, Fares and Charges on Behalf of Air Canada Applicable to the Transportation of Passengers and Baggage Between Points in Canada/USA and Points in Areas 1/2/3 and Between the USA and Canada, NTA(A) No. 458

RULE 10 RESERVATIONS AND SEAT SELECTION

(A) GENERAL

A ticket will be valid only for flight(s) for which reservation(s) shall have been made, and only between the points named on the ticket or applicable flight coupons. A passenger holding an unused open-date ticket or portion thereof or exchange order for onward travel, or who wishes to change his ticketed reservation to another date, shall not be entitled to any preferential right with respect to the obtaining of reservations.

(B) CONDITIONS OF RESERVATIONS

(1)  A reservation for space on a given flight is valid when the availability and allocation of such space is confirmed by the carrier or its agent and entered into the carrier’s reservation system. A validated ticket will be issued to the passenger subject to payment or other satisfactory credit arrangement, provided that all applicable requirements are complied with, including any requirement set out in applicable fare rule, such as ticketing time limits. Reservation of space may be cancelled by carrier without notice if these requirements are not complied with, including if ticket is not issued within the ticketing time limit stated in applicable fare rule.

(2)  Reservations – Reservations requested from any carrier or authorized agency will be accepted subject to the ticketing provision of the rule governing the fare used.

(C) SEAT ALLOCATION

(1)  Carrier does not guarantee allocation of any particular space in the aircraft.

….

(D)  APPLICABLE FEES

….

(4) The Seat Selection Fee is Non Refundable unless passenger is moved by Air Canada prior to departure, has a confirmed upgrade to a higher cabin-class or changes with itinerary, flight or fare and seat becomes complimentary.

NOTE: Having a seat selected may decrease passenger chances of getting denied boarding. (see boarding priorities in Rule 90).

RULE 90 DENIED BOARDING

(A) When the AC is unable to provide previously confirmed space due to there being more passengers holding confirmed reservations and tickets than for which there are available seats on a flight, AC shall implement the provisions of this rule, except for employee and industry discounted travel, unless applicable local law provides otherwise. ….

(B) REQUEST FOR VOLUNTEERS

(1) AC will request volunteers from the confirmed passengers to relinquish their seats in exchange for compensation, the amount and form of which will be at Air Canada’s discretion.

(2) Once a passenger has voluntarily relinquished his seat, he will not later be involuntarily denied boarding unless he was advised at the time he volunteered of such possibility and the amount of compensation to which he would be entitled.

(3) The request for volunteers and the selection of passengers to be denied boarding shall be in a manner solely determined by AC.

(C) BOARDING PRIORITIES

(1) If a flight is overbooked no passenger may be involuntarily denied boarding until AC has first first [sic] requested volunteers to relinquish their seats.

(2) In the event there are not enough volunteers, other passengers may be involuntarily denied boarding in accordance AC boarding priority policy. Passengers with confirmed reservations, will be permitted to board in the following order until all available seats are occupied:

….

(D) TRANSPORTATION FOR PASSENGER DENIED BOARDING

When a passenger has been denied boarding, either voluntarily or involuntarily,

(1)  A passenger will be considered to have been denied boarding when

(a)  The passenger presented himself for carriage in accordance with this tariff: Having complied fully with AC applicable reservation, ticketing, Immigration formalities, check-in and boarding within the time limits at the location set out in Rule 70-check-in and boarding time limits; and

(b)  It must not have been possible to accommodate the passenger on the flight on which he held confirmed reservations and the flight must have departed without him.

(2)  In such instances, carrier will:

(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 the 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 refunds (d), 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 (a) thru (c) above within a reasonable amount of time, make involuntary refund in accordance with Rule 100 refunds (d), or upon request, for denied boardings [sic] within Air Canada’s control, return passenger to point of origin and refund in accordance with Rule 100-refunds (d), 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 (e) upon passenger’s request,

(e) For denied boarding within Air Canada’s control, if passenger provides credible verbal assurance to Air Canada of certain circumstances that requires his/her arrival at destination earlier than options set out in subparagraph (a) thru (c) above, Air Canada will, if it is reasonable to do so, taking all circumstances know to it into account and subject to availability, buy passenger seat on another carrier whose flight is scheduled to arrive appreciably earlier than the options proposed in (a) thru (c) above.

(E) COMPENSATION FOR INVOLUNTARY DENIED BOARDING

In addition to providing transportation in accordance with Rule 90 – Denied Boarding (d) (2), a passenger who has been denied boarding involuntarily will be compensated by Air Canada as follows:

(1)  Conditions For Payment

(a) The passenger must be considered to have been denied boarding in accordance with Rule 90-Denied Boarding (D)(1) above.

(b) The passenger will not be eligible for compensation:

(i) If he is offered accommodation or is seated in a compartment of the aircraft other than that specified on his ticket at no extra charge to him. (should he be seated in a compartment for which a lower fare applies, he shall be entitled to the appropriate refund; or

(ii) If he has been refused transportation in accordance with Rule 75; or,

(iii) When the flight on which he holds a confirmed and ticketed reservation is cancelled or space has been requisition by the government; or

(iv) If, for operational and safety reasons beyond carrier’s control, his aircraft has been substituted with one having lesser capacity and carrier is able to demonstrate that all reasonable measures were taken to avoid substitution or it was impossible to take such measures.

(v) No denied boarding compensation will be provided to the attendant of a passenger[ ]with a disability pursuant to Rule 40 -Passengers with disability;

(vi) On a flight operated with an aircraft having 60 or fewer seats, passenger is denied boarding due to safety-related weight/balance restrictions that limit payload.

(2)  Amount of Compensation
      …