Please sign in to post.

Air Canada denies refunds for canceled flights, challenges US DOT

I really wanted to make the title, “Air Canada denies refunds for canceled flights, tells DOT to drop dead.” It’s accurate, but a little click-baitish.

Short version: Air Canada continues to deny refunds for flights it cancels. Consumers are complaining. Air Canada responds by defying the US Dept of Transportation’s enforcement letters in its response.

It will be interesting to see how DOT responds. If there is no sanction, do other airlines follow Air Canada’s lead?

https://crankyflier.com/2020/07/09/air-canada-earns-the-cranky-jackass-award-for-continuing-to-avoid-refunds/

Posted by
1666 posts

Something I've never seen definitively answered is which country's rules apply on a return flight.

  • If the flight originates in Canada, does the policy of that country take precedence for the entire flight?
  • Does the flight from Canada fall under the Canadian rule and the flight from somewhere else under the other county's rule?
  • Is it in the country the flight was purchased-thus if you bought in on Air Canada's website, technically is it a Canadian purchase even if you live in Los Angeles?
  • What about foreign carriers, if I buy a return ticket from Calgary to Paris on Air France, does that purchase fall under Canadian rules or EU rules?

I sense the airlines are very happy to keep the waters muddy.

Posted by
3666 posts

I have read posts on other travel sites that yes, AC is refusing refunds regardless of where you live. For some, at least since they are transferrable credits, you can sell them off or give to friends, but recently a Canadian said they were charged to transfer credits to someone else. I just got my daughter's number they gave her for the credit, and was able to add that to a flight with no extra financial impact.
I think AC is within its rights as a non-American company.

Posted by
2164 posts

AC should be no more within its rights as a foreign company than US airlines are in regards to EU rule 261. If the US airline's flight is coming out of the EU, then the EU rules apply. In the case cited in the Cranky Flier link, the flights in question, while round-trips to Vancouver, were coming from the US (and actually originating here). Flights from the US were cancelled, US rules need to apply. If AC can't abide by those rules, they should not be able to operate here. At the very least, I would think a bank would have no problem refunding the full ticket costs due and then recovering from AC for the product/service not being provided.

Posted by
3444 posts

Yes AC is within its rights as a non US based company to do whatever it is allowed to in Canada for flights not touching down in the US. However, one of the requirements to operate flights in and out of the US for any airline is it must adhere to DOT and other US air regulations. DOT can cancel their landing rights. Does this matter to AC right now? Apparently not if they refuse to refund cancelled flights to and from the US. Maybe they are OK with losing their flights to the US.

Credit card chargebacks are also difficult in this situation. You have received a voucher good for the amount of the flight if the flight is cancelled. So technically you have received something more than nothing that has value. Chargebacks work when you received nothing for the purchase price.

As far as where the ticket was purchased, it does not apply here as far as I can understand things. Also, AC maintains a separate web site for the US, so your purchase is made in the US, not Canada, when you use the web page. I just tried to do a booking and the AC Canada web site would not allow me to since my IP address is not within Canada and forced me to the US one. It was quite insistent.

Posted by
1223 posts

Presumably AC is taking the not unreasonable approach that there's nothing the US government can do now, so string out any regulatory/legal action and (assuming AC survives as the same legal entity), once it has money coming back in it can sort things out then? I'm assuming AC wasn't so foolish as to leave any of its aeroplanes in the US that could be seized - most airlines seem to have moved quickly to get theirs back home when this all started.

Posted by
10 posts

My bad experience several years ago taught me NEVER to fly Air Canada, which is a bummer since I live in Michigan.

Posted by
7096 posts

https://www.transportation.gov/briefing-room/us-department-transportation-issues-enforcement-notice-clarifying-air-carrier-refund

that U.S. and foreign airlines remain obligated to provide a prompt refund to passengers for flights to, within, or from the United States when the carrier cancels the passenger’s scheduled flight or makes a significant schedule change and the passenger chooses not to accept the alternative offered by the carrier. The obligation of airlines to provide refunds, including the ticket price and any optional fee charged for services a passenger is unable to use, does not cease when the flight disruptions are outside of the carrier’s control (e.g., a result of government restrictions).

Looks like Air Canada is playing "chicken" to see if the US DOT will do something punitive ( i.e. revoke landing rights?)

Posted by
2303 posts

It seems an odd strategy to bite the hand that regulates you in what would seem to be Air Canada's second most important market.

Posted by
1666 posts

Since the Canadian Transport Agency is allowing airlines to provide vouchers I wonder if the foreign carriers are doing the same for flights to or from Canada. I haven't heard any stories, most Canadians just talk about what Air Canada and WestJet are doing/not doing.

Posted by
2900 posts

It appears that Air Canada has no leg to stand on, and it's just a question of whet the consequences will be. The DOT rule seems pretty clear.

Posted by
2303 posts

loosley--

Perhaps I misunderstand your comment, but it seems to imply that Air Canada is offering refunds on any flight not originating in Canada. That is not correct. Paragraph 2 from the article you site states...

Customers with flights originating in the European Union, Switzerland
and Iceland due to the pandemic are "entitled to receive a refund,"
states a document recently posted to Air Canada's website.

The article goes on to say that Air Canada acknowledged that the the EU requires Air Canada to offer refunds for some non-refundable tickets. The policy does not apply anywhere except in the locales mentioned in the quote above and certainly does not apply to the US.

Posted by
98 posts

I am on hold with Air Canada right now (58 minutes so far). My nonstop flight from Montreal to San Francisco was cancelled yesterday.
I checked on my credit card....the option to dispute doesn't show up because it was purchased March 1.

I am going to request a refund and see what happens. I'll let you know.

Posted by
7096 posts

Posted by PandaBear
NorCal
07/14/20 08:32 PM
I am on hold with Air Canada right now (58 minutes so far).....
I am going to request a refund and see what happens. I'll let you know.

21 hours later and......?

Posted by
98 posts

21 hours later and......?

I was on hold for 2 hours and 10 minutes and was told that they were not issuing refunds. I referenced the DOT and it was suggested I submit an email from their site, which when I tried to do, basically stated a refund was not available (LOL)

So I filed a dispute with my credit card provider last night. I talked to their dispute resolution department today and shared that my flight was cancelled and Air Canada refused a refund and only offered a credit. I'll let you know later with what happens.

Posted by
9180 posts

Just as airlines flying in and out of the EU have to follow EU rules, airlines flying in and out of the U.S. have to follow U.S. rules.

The DOT hasn't done anything yet but they could threaten to deny landing rights. Since other Canadian airlines fly between the U.S. and Canada, they could pick up the slack that Air Canada had to give up. We wouldn't be banning all Canadian airlines, just one.

Air Canada is probably trying to buy time so they don't have to give up cash that quickly.

Posted by
9180 posts

According to Scott McCartney in today's Wall Street Journal, Air Canada has the most refund complaints filed at the DOT among foreign airlines with 969. U.S. authorites say U.S. regulations apply. But, as he says, "the DOT has yet to enforce its own rules on foreign airline by fining them or forcing them to give refunds."

Posted by
98 posts

I will file a complaint.
In the meantime, I discovered that after my initial phone call, Air Canada did not cancel my flight. I received another updated flight schedule. When I called back yet again, I was informed that the airline will not accept cancellations on the phone. They require you cancel online. I assume that's so they can then say you cancelled. They also require you to acknowledge you agree to their terms.
So, I called the dispute # for my credit card. I explained what the airline was doing and how I felt they were doing it so they could fight my dispute. The credit card rep indicated that I should still win the dispute, as I had one non stop flight and now they have offered a connecting flight or air credit.
So, we'll see how it goes.

Posted by
98 posts

I just wanted to update about my credit dispute: this was the response from Chase
"We reviewed your dispute with the merchant and decided in your favor. We closed this dispute and changed the temporary credit we issued your account while your dispute was still under investigation into a permanent credit."

I was a little worried, as the ticket was purchased over 4 months ago, but it all worked out for me. I wouldn't have minded quite so much but I had purchased first class tickets as I was traveling with my mom, and it was quite a bit of money.

Posted by
2303 posts

Panda... Congratulations on your success on the charge back! Thanks for the update.

Posted by
2164 posts

And kudos to Chase for supporting the little guy so quickly. This should have been an automatic for them, but these days one can never be sure.

Posted by
3444 posts

I really don't understand the hard nosed approach AC is taking on refunds. Yes, I understand they are short of money, just like every airline is right now. But to blatantly disregard rules they swore to abide by to get landing rights in the US is just not right. I wonder if they get fined by the DOT they will refuse to make that payment too?