This story was produced in partnership by PaxEx.Aero, The Business of Passenger ExperienceAir Canada reacted to passengers who had asked for refunds on cancelled flights one year ago. The carrier claimed that its policy of not refunded passengers was in compliance to DOT policy, and that the Agency had no jurisdiction to enforce it otherwise. In the aftermath of a $25 million penalty, the carrier is reiterating those positions to the US Department of Transportation.Today's brief by the carrier states that the US DOT did not allege any specific facts and that Air Canada's policy of offering flight vouchers to customers whose flight reservations had been cancelled after March 19, 2020, but before April 13, 2021, due to governmental restrictions (Contractual Refund Policy), was unfair.One of the claims made by airlines:Transborder flight cancellations were caused by mounting concerns about the spread of COVID-19 and pursuant to several government directives (both which were beyond Air Canada's control).It was in compliance with its Conditions of Carriage & Tariff, applicable fare rules and DOT/CTA regulations. Air Canada offered a full refund as a travel credit for cancellations.The Enforcement Complaint does not allege facts that would show that Air Canada's Contractual Refund Policy caused substantial harm that could not reasonably be avoided and that the alleged harm wasn't outweighed by any countervailing advantages to consumers or to competitors.Air Canada's assertion that consumers should expect it not to violate the law regarding its carriage contract but to actually behave is the most striking. Air Canada admits that it offered refunds to passengers in similar circumstances prior to the COVID-19 pandemic.It also states that this does not matter. Air Canada never made public or committed to its goodwill program or gave any assurance that it would continue in force. Customers therefore had no reason to rely on this temporary customer service policy of goodwill.Air Canada claims that the obligation to reimburse passengers for the original payment if a flight is cancelled is guidance and not law. Air Canada claims that the obligation to refund passengers to their original form of payment when a flight does not operate is only in an Industry Letter from 1996, which was never made available to Air Canada. (2) A statement from the preamble of a 2011 rulemaking that has no relevance to the current situation.Air Canada claims that it is not required to issue refunds for ticket refunds. It also says that its Customer Service Plan doesn't specify the circumstances in which refunds must be issued.The Department could have required that Customer Service Plans include a provision that cash refunds are provided in the event that a non-refundable tickets is cancelled by a carrier. However, it refused to do so. This is consistent with the ADA, which leaves commercial ticket pricing up to the market. Despite the fact that the DOT might wish Section 259.5 had such a requirement, and given the extreme circumstances of the pandemic, and the criticisms it is currently facing, this does not alter the facts or the law.Air Canada claims that the countervailing benefits outweighed any harm it caused by its decision not to offer cash refunds to customers.DOT has not provided sufficient evidence to prove that customers were significantly harmed or likely be substantially harmed. It also failed to show that the harm could have been reasonably avoided and that the harm cannot be outweighed by the benefits to consumers and competition.Air Canada blames the customer for purchasing a nonrefundable ticket. Customers had the choice to buy a refundable ticket to avoid losing their cash. If they wanted to be fully protected against loss, they could choose to pay a higher price to get a refundable fare.
