Supreme Court launches appeal hearing on airline industry’s objections to passenger protection rules

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Air Canada, Porter Airlines and several global carriers take their fight against the country’s passenger protection rules to the Supreme Court of Canada on Monday.

The country’s top court will hear government and industry arguments for and against Canada’s Air Passenger Protection Regulations, which went into effect in 2019 and outline how airlines are to treat customers whose flights are disrupted or whose luggage is lost.

The Canadian Transportation Agency’s rules, which have been toughened over time, say airlines owe compensation to passengers whose flights are delayed or cancelled, within certain time periods and depending on the causes. There are also standards under which delayed customers are entitled to food and lodging, and compensation for lost or damaged luggage.

The airline industry, led by the International Air Transport Association, lost its appeal of the rules before the Federal Court of Appeal in 2022, except for some luggage provisions. The Supreme Court of Canada agreed to hear the industry’s appeal of that decision in a hearing scheduled for Monday morning in Ottawa.

The airlines argue Canada does not have the right to impose rules on foreign carriers, and the compensation amounts exceed passengers’ actual losses.

The government has said the rules are designed to ensure passengers are treated fairly and in a consistent manner, particularly as the travel surge after pandemic restrictions were lifted revealed the industry’s ill-preparedness.

The regulations cover all airlines flying into, out of, or within Canada. They say passengers whose flights are cancelled are entitled to a refund or a seat on the next available departure, or with another airline. The airline must also compensate passengers for the inconvenience of a cancelled or delayed flight, if the reason for the delay is within the airline’s control. The amounts vary by length of delay and size of airline but can reach $1,000 for delays of nine or more hours.

However, airlines and passengers alike say the complaint-resolution system is unfair, complicated and slow. The CTA, which rules on the passenger complaints, has a backlog of about 70,000 files, the agency said on Thursday.

The government has proposed more stringent rules that would make it harder for airlines to dodge responsibility for delays.

Airlines that cancel or delay a flight will no longer have a “safety” loophole that automatically absolves them of giving passengers compensation, free food and other assistance in some cases, according to the proposed changes.