Agency Rulings

Order No. 2004-A-185

May 3, 2004

IN THE MATTER OF the provisions set out in the international tariff of Air India Limited also carrying on business as Air India concerning refunds for tickets purchased to replace lost tickets.

File No. M4110/A626-1

Following an investigation into a complaint against Air India Limited also carrying on business as Air India (hereinafter Air India) concerning the carrier's International Passenger Rules and Fares Tariff No. AI-1, NTA(A) No. 317 (hereinafter Air India's International Tariff), the Air Travel Complaints Commissioner referred the above matter to the Canadian Transportation Agency (hereinafter the Agency).

During the course of its review of Air India's International Tariff, the Agency discovered that while Rule 90(F) of the tariff enables passengers to obtain refunds for lost tickets, it does not provide for refunds of tickets purchased to replace lost tickets. The Agency's research also revealed that the International Air Transport Association (hereinafter the IATA) Passenger Services Conference Resolutions Manual (hereinafter the IATA Manual), the IATA Ticketing Handbook and several air carriers' international tariffs provide for refunds of tickets purchased to replace lost tickets. More particularly, paragraph 4.2 of the IATA Manual and paragraph 11.1.4.2 of the IATA Ticketing Handbook, as found under Chapter 11 entitled "Refunds - Lost Ticket", provide that:

The amount of refund for lost tickets shall be the difference between the total amount paid for the carriage, including any replacement ticket, and the cost of the carriage actually used.

Accordingly, by Decision No. LET-A-241-2003 dated December 5, 2003, the Agency advised Air India that, in light of the absence of provisions concerning refunds for replacement tickets, the Agency is of the opinion that Rule 90 of Air India's International Tariff may not be reasonable within the meaning of subsection 111(1) of the Air Transportation Regulations, SOR/88-58, as amended (hereinafter the ATR), which provides 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.

The Agency, therefore, provided Air India with the opportunity to show cause why it should not be required to revise Rule 90 of its international tariff to include a provision that would address this issue.

On December 16, 2003, Air India responded to Decision No. LET-A-241-2003. In its response, Air India submitted that paragraphs E and F of Rule 90 of Air India's International Tariff, when read together, provide for refunds in cases of lost tickets.

The Agency has carefully reviewed and examined paragraphs E and F of Rule 90 of Air India's International Tariff and is of the opinion that these paragraphs do not provide for refunds for tickets purchased to replace lost tickets.

Following further exchanges between Agency staff and Air India officials respecting this matter, Airline Tariff Publishing Company, Agent, on behalf of Air India, filed with the Agency, on February 18, 2004, a revision to Rule 90 of Air India's International Tariff for effect April 3, 2004. This revision involved the addition of the following provision to Rule 90:

(2) Refund Amount

(a) If no portion of the ticket has been used, refund will be an amount equal to the fare and charges paid, less the applicable Service Charge (...).

(b) If a portion of the ticket has been used, refund will be an amount equal to the difference between the fare and charges paid and the fare and charges applicable to the transportation actually used, less the applicable Service Charge (...).

The Agency has carefully reviewed the revision to Air India's International Tariff and notes that while the tariff provides for refunds for unused tickets or portions thereof, these refunds would not fully reimburse passengers who must purchase replacement tickets as such tickets are normally priced at amounts higher than those paid by passengers for their original tickets. Therefore, an Air India passenger who loses a ticket would be penalized by having to pay the difference between the higher-priced replacement ticket and the ticket initially purchased. The Agency is of the opinion that penalizing passengers in this way is prejudicial to the interests of the travelling public, and is not just and reasonable within the meaning of subsection 111(1) of the ATR. Accordingly, the Agency finds that Rule 90 of Air India's International Tariff is contrary to subsection 111(1) of the ATR.

In light of the foregoing, the Agency, pursuant to section 26 of the Canada Transportation Act, S.C., 1996, c. 10, hereby directs Air India to revise Rule 90 of its International Passenger Rules and Fares Tariff No. AI-1, NTA(A) No. 317, within thirty (30) days of the date of this Order, to include a provision which provides for refunds of tickets purchased to replace lost tickets. In this regard, Air India may wish to consider the wording of paragraph 4.2 of the IATA Manual cited above as well as the wording set out in the tariffs of other international air carriers which provide for refunds for replacement tickets.

Following its review of the required tariff provision, the Agency will determine whether further action is required in this matter.