Decision No. 42-C-A-2007

January 26, 2007

File No. M4370/A74/01-1797

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Complaint

[1] This complaint originally involved two respondent carriers, United Airlines, Inc. carrying on business as United Airlines (hereinafter United Airlines) and Air Canada. As United Airlines was, until March 10, 2006, under the protection of the Companies' Creditors Arrangement Act, the Agency elected to issue a separate decision with respect to each respondent carrier.

[2] On January 26, 2006, the Agency issued Decision No. 38-C-A-2006 which dealt with Air Canada's involvement in this application. For ease of reference and understanding, the background information to the complaint as well as a summary of the positions of the parties is included in Decision No. 38-C-A-2006. The Agency therefore refers parties to that Decision for any such information.

Issue

[3] The issue to be addressed is whether United Airlines has complied with the regulatory requirements imposed by the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR), specifically whether United Airlines acted in accordance with the applicable terms and conditions of carriage of its international tariff in effect at the time of the incident.

Analysis and findings

[4] In making its findings, the Agency has considered all of the evidence submitted by the parties during the pleadings, as well as the terms and conditions of United Airlines' international tariff.

Statutory provisions

[5] A number of statutory provisions in force at the time of the incident are relevant to the present analysis.

[6] Subsections 110(1) and 110(4) of the ATR provide that:

110.(1) Except as provided in an international agreement, convention or arrangement respecting civil aviation, before commencing the operation of an international service, an air carrier or its agent shall file with the Agency a tariff for that service, including the terms and conditions of free and reduced rate transportation for that service, in the style, and containing the information, required by this Division.

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.

[7] Section 113.1 of the ATR states that:

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.

[8] The terms and conditions of carriage applicable to United Airlines Flight Nos. UA2 and UA1 between London and Delhi on September 19, 2001 and September 27, 2001, respectively, were governed by United Airlines' international tariff in effect at that time.

[9] United Airlines' international tariff's Rule 85(A) and (D)(2)(a) Schedules, Delays and Cancellation of Flights, provides as follows:

(A) Schedules

Times 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 and UA assumes no responsibility for making connections. UA will not be responsible for errors or omissions either in timetables or other representations of schedules. No employee, agent or representative of UA is authorized to bind UA by any statements or representation as to the dates or times of departure or arrival, or of the operation of any flight.

(D) Cancellations

(2) UA may, without notice, cancel, terminate, divert, postpone, or delay any flight or the further right of carriage or reservation of traffic accommodations and determine if any departure or landing should be made, without any liability except to refund in accordance with its tariffs the fare and baggage charges for any unused portion of the ticket, when it would be advisable to do so:

(a) because of any fact beyond its control (including, but without limitation, meteorological conditions, acts of god, force majeure, strikes, riots, civil commotions, embargoes, wars, hostilities, disturbances or unsettled international conditions) actual, threatened or reported or because of any delay, demand, condition, circumstances or requirement due, directly or indirectly, to such fact; [emphasis added]

[10] The Agency has reviewed the complainants' account of their dealings with United Airlines at Heathrow Airport on September 19, 2001, and has also taken into consideration United Airlines' position with respect to the incident. The Agency acknowledges that United Airlines Flight Nos. UA2 and UA1 were cancelled as a result of unsettled international conditions resulting from the tragic events of September 11, 2001. The Agency recognizes the fact that United Airlines attempted to secure transportation for the complainants with alternate carriers in order for them to continue their journey to India. The Agency is of the opinion that United Airlines, at no time, refused transportation to the complainants. Rather, United Airlines cancelled its flights due to international conditions at that time and its sole obligation to its passengers was to either provide onward transportation to the originally ticketed final destination on its own service or that of other carriers, or to refund the unused portions of their tickets, as per Rule 85 of its international tariff.

[11] The Agency acknowledges that United Airlines clearly attempted to accommodate the complainants first with Lufthansa and then with Virgin Atlantic. The Agency also notes that United Airlines has indicated that the complainants would be entitled to a refund for the applicable unused portion of their airline tickets as a result of the schedule change.

[12] The Agency notes, however, that as of the date of the issuance of this Decision and contrary to subsection 110(4) of the ATR, United Airlines has yet to refund the complainants for the unused portion of their tickets from London to Delhi on September 19, 2001 and from Delhi to London on September 27, 2001 as set out in Rule 85(D)(2) of United Airlines' international tariff applicable in the present instance.

Compensation and corrective measures

[13] Section 113.1 of the ATR provides that 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.

[14] As a result of United Airlines' cancellation of Flight No. UA2 on September 19, 2001 and Flight No. UA1 on September 27, 2001, the complainants were forced to make alternate arrangements to travel from London to Delhi on September 19, 2001 and from Delhi to Toronto on September 27, 2001.

[15] In light of the foregoing, the Agency finds that United Airlines should, pursuant to paragraph 113.1(a) of the ATR, reimburse the complainants for the unused United Airlines portions of their original tickets as provided for in Rule 85 of United Airlines' international tariff.

[16] With respect to the out-of-pocket expenses incurred by the complainants in London and Delhi as a result of the cancellation of the United Airlines flights on both September 19, 2001 and September 27, 2001, Rule 85(D)(2) of United Airlines' international tariff clearly provides that a flight can be cancelled due to unsettled international conditions without liability, except to refund the unused ticket or portion of ticket.

[17] As for damage such as humiliation, defamation, loss of human dignity and respect as well as loss of vacation time suffered by the complainants as a result of United Airlines' cancellation of Flight Nos. UA2 and UA1 on September 19, 2001 and September 27, 2001, respectively, the Canada Transportation Act, S.C., 1996, c. 10 and the ATR do not empower the Agency to award such compensation.

Conclusion

[18] Based on the above findings, the Agency concludes that United Airlines applied the terms and conditions of carriage set out in its international tariff with respect to the cancellation of its flights between London and Delhi.

[19] While the Agency found that United Airlines should reimburse the unused portion of the complainants' tickets, the Agency cannot legally compel United Airlines to do so. That is as a result of the sanction order issued by Justice Mesbur of the Superior Court of Justice, Commercial list, in Ontario on March 10, 2006, that all claims of a financial nature against United Airlines arising out of incidents that occurred prior to February 1, 2006 have now been extinguished. The Agency, therefore, cannot order United Airlines to compensate the complainants as it otherwise would have done.

Members

• Guy Delisle
• Baljinder Gill