Decision No. 67-C-A-2018

December 21, 2018

APPLICATION by Mark Kenny and Maia Gwynne (applicants) against China Southern Airlines (China Southern).

Case number: 
18-04106

SUMMARY

[1] The applicants filed an application with the Canadian Transportation Agency (Agency) against China Southern regarding its failure to provide a refund for the non-delivery of premium economy seats during a round trip flight from Vancouver, Canada, to Bangkok, Thailand, via Guangzhou, China, from March 15, 2017 to April 2, 2017.

[2] The applicants are seeking a refund in the amount of CAN$829.58, which is the difference in fares between premium economy and economy tickets.

[3] The Agency will address the following issues:

  1. Did China Southern properly apply the terms and conditions set out in its International Rules and Fares Tariff, NTA(A) No. 532 (Tariff) relating to class of service, as required by subsection 110(4) of the Air Transportation Regulations, SOR/88-58, as amended (ATR)? If China Southern did not properly apply the terms and conditions set out in its Tariff, what remedy, if any, is available to the applicants?
  2. Should China Southern modify its Tariff to include the terms and conditions relating to its “Premium Economy” class of service pursuant to paragraph 122(c) of the ATR?

[4] For the reasons set out below, the Agency finds that China Southern did not properly apply the terms and conditions set out in its Tariff.

[5] The Agency orders China Southern to either:

  1. refund the applicants, within the next 10 days, an amount of CAN$829.58; or,
  2. refund the applicants pursuant to Tariff Rule 90(D)(2)(b)(ii), Exception (bb), within the next 10 days; and provide to the Agency, within 10 days, a detailed calculation with supporting evidence explaining how it has applied Rule 90(D)(2)(b)(ii), Exception (bb) as it pertains to the applicants’ refund. If the Agency is not satisfied of the calculation filed by China Southern, the Agency may order China Southern to pay the compensation the Agency considers appropriate.

[6] Pursuant to paragraph 28(1)(b) of the CTA, if China Southern does not make any refund to the applicant’s within the next 10 days, China Southern will be deemed to have elected to refund the applicants an amount of CAN$829.58.

[7] In addition, the Agency orders China Southern to modify its Tariff to include the terms and conditions relating to its premium economy class of service as soon as possible and no later than January 21, 2019.

BACKGROUND

[8] The applicants purchased tickets for themselves and tickets for their daughter and her boyfriend for a round trip from Vancouver to Bangkok, via Guangzhou, , from March 15, 2017 to April 2, 2017. The present complaint only relates to the tickets they purchased for themselves.

[9] The applicants submit that the difference in the total fares between the premium economy tickets they purchased for themselves and the economy tickets they purchased for their daughter and her boyfriend is CAN$829.58. They argue that they were given premium economy seats only during the first leg of their trip, that is from Vancouver to Guangzhou, and were given economy seats for the three other segments of their flights.

THE LAW

[10] 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.

[11] If the Agency finds that an air carrier has failed to properly apply its tariff, section 113.1 of the ATR empowers the Agency to direct the carrier to:

  1. take the corrective measures that the Agency considers appropriate; and
  2. 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.

[12] Section 122 of the ATR, in respect of international carriage, provides as follows:

Every tariff shall contain

(a) the terms and conditions governing the tariff generally, stated in such a way that it is clear as to how the terms and conditions apply to the tolls named in the tariff;

[…]; and

(c) the terms and conditions of carriage, clearly stating the air carrier’s policy in respect of at least the following matters, namely,

[…]

[13] Rule 90(A) of China Southern’s Tariff, regarding refund provisions, states that:

In case of refund, whether due to failure of the carrier to provide the accommodation called for by the ticket, or due to voluntary change of arrangements by the passenger, the conditions and amount of refund will be governed by this tariff.

[14] Rule 90(D) of China Southern’s Tariff, regarding the involuntary refunds, states that:

(1) As used herein, the term “involuntary refund” shall mean any refund to a passenger who is prevented from using the carriage provided for in his/her ticket due to:

[…]

(c) substitution of a different type of equipment or different class of service by the carrier;

[…]

(2) Involuntary refunds will be computed as follows:

(a) When no portion of the ticket/MCO/PTA has been used, the amount of refund shall equal the fare paid,

(b) When a portion of the trip has been made, the amount of refund will be either:

(i) An amount equal to the one-way fare(s) and charges for the unused portion(s) calculated from the point of termination to the stopover/destination point or the point where travel resumed (less the same rate of discount, if any, that was applied in computing the original fare) via:

(aa)   the routing specified on the ticket, if the point of termination was on such routing; or

(bb) the routing of any carrier operating between such points, if the point of termination was not on the routing specified on the ticket. In such case, the amount of refund will be based on the lowest fare applicable between such points.

(ii) The difference between fare paid and the fare for the transportation used, whichever is higher.

EXCEPTION: When a passenger holds a ticket for a higher class of service and is required by the carrier to use a lower class of service on any portion of such carriage, the amount refunded will be as follows:

[…]

(bb) (Applicable to Round Trip (RT)/Circle Trip (CT)/Open Jaw (OJ) fares.) The difference between half of the RT/CT/OJ fare for the higher class of service and half of the corresponding RT/CT/OJ fare for the lower class of service between the points where the lower class of service is used.

[…]

DID CHINA SOUTHERN PROPERLY APPLY THE TERMS AND CONDITIONS SET OUT IN ITS TARIFF RELATING TO CLASS OF SERVICE AS REQUIRED BY SUBSECTION 110(4) OF THE ATR? IF CHINA SOUTHERN DID NOT PROPERLY APPLY THE TERMS AND CONDITIONS SET OUT IN ITS TARIFF, WHAT REMEDY, IF ANY, IS AVAILABLE TO THE APPLICANTS?

Positions of parties

THE APPLICANTS’ POSITION

[15] The applicants submit that they purchased premium economy tickets for themselves and economy tickets for their daughter and her boyfriend on a round trip from Vancouver to Bangkok via Guangzhou. In support of their application, the applicants submitted two invoices dated October 29, 2016: the first invoice issued to them shows a charge of CAN$3,170 while the second invoice issued to their daughter and her boyfriend shows a charge of CAN$2,340.42.

[16] The applicants argue that they were given the premium economy seats only during the first leg of their trip, that is from Vancouver to Guangzhou, and were given economy seats for the three other segments of their flights.

[17] The applicants state that upon complaining to China Southern regarding the non-delivery of the premium economy seats, China Southern first offered $45 per passenger and subsequently offered $99 per passenger. Both offers were declined by the applicants who are seeking a full refund of the difference of fares – an amount of CAN$829.58.

CHINA SOUTHERN’S POSITION

[18] On August 23, 2018, the Agency opened pleadings and directed China Southern to file its answer to the applicants’ application by September 13, 2018. China Southern failed to file an answer.

ANALYSIS AND DETERMINATION

[19] In accordance with a well-established principle on which the Agency relies when considering such applications, the onus is on the applicants to prove, on a balance of probabilities, that the carrier has failed to properly apply, or has inconsistently applied, the terms and conditions set out in its tariff.

[20] The Agency notes that Rule 60(E) of the Tariff states that the carrier does not guarantee allocation of any particular space in the aircraft. However, the Agency also notes that Rule 90(A) provides for a refund if the carrier fails to provide the accommodation called for by the ticket.

[21] It is uncontested that the applicants purchased premium economy tickets for themselves. The Agency also notes that the applicants acknowledge that they benefitted from the premium economy seats for the first leg of their trip. It is also uncontested that the applicants did not get premium economy seats for three of the four segments of their round trip. As such, the Agency finds that China Southern failed to apply its Tariff as a refund has yet to be made.

[22] The Agency notes that the applicants benefitted from premium economy seats for the first leg of their trip and that Tariff Rule 90(D)(2)(b)(ii), Exception (bb), does not allow for a full refund as sought by the applicants. Rather, Tariff Rule 90(D)(2)(b)(ii), Exception (bb), provides for a refund to be calculated based on the difference between half of the round trip fare for the premium economy class of service and half of the corresponding round trip fare for the economy class of service between the points where the economy class of service is used.

[23] However, China Southern has not filed any submission in this proceeding and, based on the evidence filed by the applicants, the Agency cannot determine the amount that they are entitled to based on the Tariff. However, the Agency notes that the difference of fares for the full round trip is uncontested.

[24] In light of the above, the Agency finds that China Southern must either:

  1. refund the applicants, within the next 10 days, an amount of CAN$829.58; or
  2. refund Mr. Kenny and Ms. Gwynne pursuant to Tariff Rule 90(D)(2)(b)(ii), Exception (bb), within the next 10 days; and provide to the Agency, within 10 days, a detailed calculation with supporting evidence explaining how it has applied Rule 90(D)(2)(b)(ii), Exception (bb) as it pertains to the applicants’ refund. If the Agency is not satisfied of the calculation filed by China Southern, the Agency may order China Southern to pay the compensation the Agency considers appropriate.

[25] Pursuant to paragraph 28(1)(b) of the CTA, if China Southern does not make any refund to the applicants within the next 10 days, China Southern will be deemed to have elected to refund them an amount of CAN$829.58.

SHOULD CHINA SOUTHERN MODIFY ITS TARIFF TO INCLUDE THE TERMS AND CONDITIONS RELATING TO ITS “PREMIUM ECONOMY” CLASS OF SERVICE PURSUANT TO PARAGRAPH 122(C) OF THE ATR?

ANALYSIS AND DETERMINATION

[26] With respect to international carriage, paragraph 122(c) of the ATR states that the tariff shall contain the terms and conditions of carriage in respect of “at least the following matters […].” The use of the phrase “at least” in paragraph 122(c) of the ATR indicates that the list of matters that shall be contained in a tariff is not exhaustive. Rather, the Agency has the authority to perform a broad interpretation of this provision and to consider additional matters that are not otherwise listed therein.

[27] The Agency notes that Rule 6 of the Tariff, regarding the classes of service, does not reflect that China Southern offers the premium economy class of service while this class of service is available for flight to and from Canada. The Agency notes that Rule C115 Section I (A) of the Tariff, relating to checked baggage between China and Canada, makes reference to premium economy class and economy class and provide for a distinctive allowance for each class. In addition, the Agency notes that the fare appearing on the applicants electronic ticket receipt which reads “S2LACCA” for all four segments of their trip were filed with the Airline Tariff Publishing Company (ATPCO) as “premium economy fares”.

[28] Based on the above, the Agency finds that by omitting to include the terms and conditions associated with its premium economy class of service, China Southern is in contravention with paragraph 122(C) of the ATR. Therefore, the Agency orders China Southern to modify its Tariff to include the terms and conditions relating to its premium economy class of service.

ORDER

[29] Pursuant to subsection 113.1 of the ATR, the Agency orders China Southern to either:

  1. refund the applicants, within the next 10 days, an amount of CAN$829.58; or
  2. refund the applicants pursuant to Tariff Rule 90(D)(2)(b)(ii), Exception (bb), within the next 10 days; and provide to the Agency, within 10 days, a detailed calculation with supporting evidence explaining how it has applied Rule 90(D)(2)(b)(ii), Exception (bb) as it pertains to the applicants’ refund. If the Agency is not satisfied of the calculation filed by China Southern, the Agency may order China Southern to pay the compensation the Agency considers appropriate.

[30] Pursuant to paragraph 28(1)(b) of the CTA, if China Southern does not make any refund to the applicants within the next 10 days, China Southern will be deemed to have elected to refund them an amount of CAN$829.58.

[31] In addition, the Agency orders China Southern to modify its Tariff to include the terms and conditions relating to its premium economy class of service as soon as possible and no later than January 21, 2019.

Member(s)

J. Mark MacKeigan
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