Notice to Industry: Initiative to level the playing field among air carriers and increase rights and remedies for passengers delayed because of overbooking and cancellation of flights

Air carriers are required by law to have and apply a tariffNote1, and their terms and conditions of carriage in the tariff must be clear, just and reasonable. The Agency has the authority to suspend, disallow or substitute a term or condition of carriage it deems unclear, unjust or unreasonable.

Based on this authority, the Agency, in June, 2012, issued five final decisions on the reasonableness of international and domestic tariff provisions of some carriers about overbooking and cancellation of flightsNote2. The rulings significantly increased the rights and remedies of the passengers travelling with the air carriers named in the decisions. However, as these rulings do not apply to all air carriers, not all passengers can benefit from the same rights and remedies.

 The Agency is of the opinion that if all air carriers were to apply the rulings on overbooking and cancellation, it would further enhance consumer protection while ensuring a level playing field among air carriers.

Accordingly, the Agency will take measures to encourage carriers to voluntarily amend their tariffs to reflect the following two principles.

If a passenger is delayed due to the overbooking or cancellation of a flight within the carrier’s controlNote3, at the passenger’s discretion, the carrier will:

  1. rebook the passenger on alternate transportationto the passenger’s intended destination, at no additional cost to the passenger and within a reasonable time, using:
    1. its own service;
    2. the services of carriers with which it has an interline agreement; or
    3. where possible and necessary, the services of carriers where no interline agreement exists, or:
  2. if the purpose of the passenger’s travel is no longer valid because of the delay incurred, provide the passenger with a full refundNote4, and, when travel has already commenced, return the passenger to their point of origin, within a reasonable time at no additional cost.

In addition, the Agency considers it good practice for carriers to always assessthe needs of the passengers on a case-by-case basis, and take into account all known circumstances to avoid or mitigate the disruptions caused by the overbooking or the cancellation of flights.

Agency staff is available to work with carriers and provide guidance to help them incorporate these principles into their tariffs. Rules 90, 95 and 125 of the Agency’s Sample Tariff reflect these principles and provide carriers with text that they can choose to add to their terms and conditions of carriage.

The Canadian Transportation Agency is an independent, quasi-judicial tribunal and economic regulator of the Government of Canada. It makes decisions and determinations on a wide range of matters involving air, rail and marine modes of transportation under the authority of Parliament, as set out in the Canada Transportation Act and other legislation.

For further information:

Telephone: 1-888-222-2592
TTY: 1-800-669-5575

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