Canadian airlines ask appeal court to quash new passenger rights rules

Canadian airlines are among hundreds of carriers asking the Federal Court of Appeal to quash new rules that beef up compensation for passengers subjected to delayed flights and damaged luggage.

Air Canada and Porter Airlines Inc., along with 17 other applicants that include the International Air Transport Association (IATA) – which has some 290 member airlines – state in a court filing that required payments under the country’s new air passenger bill of rights violates international standards and should be rendered invalid.

The court application argues the new provisions contravene the Montreal Convention, a multilateral treaty, in part by setting compensation amounts based on the length of the delay and “irrespective of the actual damage suffered.”

The application, filed last Friday, also says nullifying the regulations “would avoid the confusion to passengers” who could be subject to travel regimes from multiple jurisdictions on international flights.

Starting July 15, passengers will have to be compensated up to $2,400 if they are denied boarding because a flight was overbooked and receive up to $2,100 for lost or damaged luggage. Compensation of up to $1,000 for delays and other payments for cancelled flights will take effect in December.

The issue came to the forefront after a 2017 incident in which two Montreal-bound Air Transat jets were diverted to Ottawa due to bad weather and held on the tarmac for up to six hours, leading some passengers to call 911 for rescue.

John McKenna, who heads the Air Transport Association of Canada, called the compensation grid “very high” and the new rules “outrageous.”

“They’re trying to meet international standards and do better, and I don’t see why. We’ve been complaining about that from the start, that this is going to drive up the price of flying in Canada,” he said from Portugal.

Passenger rights advocates say the rules do not go far enough, arguing the criteria for monetary compensation are tough to meet as passengers would have to present evidence that is typically in the hands of an airline.

Gabor Lukacs, founder of the group Air Passenger Rights, has said the regulations give airlines “carte blanche to refuse” compensation based on unverifiable maintenance issues.

The rules impose no obligation on airlines to pay customers for delays or cancellations if they were caused by mechanical problems discovered in a pre-flight check – walking around the aircraft before takeoff looking for defects in the fuselage and flight control surfaces – rather than during scheduled maintenance – more thorough inspections required after 100 hours cumulatively in the air.

AirHelp, a Berlin-based passenger-rights company, has said the number of issues categorized as outside an airline’s control amounts to a long list of ways to avoid compensating passengers.

The court application, which Air Canada said was initiated by the IATA, argues the new compensation rules “breach Canada’s international obligations and exceed the regulation-making authority” of the Canadian Transportation Agency.

“Aviation is a global industry and as such, regulations need to be harmonized and follow the Montreal Convention,” IATA spokeswoman Mona Aubin said in an email.

Lukacs challenged that assertion.

“IATA does not understand that in Canada, international treaties have force only to the extent that they are incorporated in law.”

The claim that overlapping legal regimes would sew confusion “was already hashed out in the European Court of Justice and was rejected,” he added.

The application for judicial review also argues the distinction between large and small carriers – defined by annual passenger numbers and bearing on compensation amount owed – amounts to “differential treatment…without any statutory authorization for such discrimination.”

The Canadian Transportation Agency said it will respond with a court filing by July 8, but declined to comment on the case.