Thousands of customers seeking refunds from Canadian airlines during the pandemic are having their requests denied, setting the stage for a legal brawl at one of Canada’s highest courts.

Passenger advocacy group Air Passenger Rights filed a case against the Canadian Transportation Agency (CTA) at the Federal Court of Appeal this week. The group is taking issue with an online statement from the CTA, which it alleges inappropriately sided with airlines, leaving passengers short-changed.

Vouchers vs. refunds

On March 25, the CTA posted a “Statement on Vouchers” online, which highlighted the importance of striking “a fair and sensible balance between passenger protection and airlines’ operational realities.” It continued to say “an appropriate approach in the current context could be for airlines to provide affected passengers with vouchers or credits for future travel.”

Gabor Lukacs, founder of Air Passenger Rights, said when passengers have reached out for a full refund for their cancelled flights, “the travel industry and the insurance industry have been passing off the CTA’s statement as if it were a legally binding ruling, which it is not.”

He said the situation has forced passengers to accept a voucher for future travel when they’re actually entitled to get their money back. Meanwhile, authorities in the European Union and the U.S. have declared passengers are entitled to refunds.

The CTA declined our interview request Thursday because the matter is before the courts.

In a prior statement, a spokesperson for the transportation agency told CityNews the agency had no concerns the online message to travellers could be interpreted as legally binding. Instead, the agency said it simply “sought to provide guidance in a situation without precedent.”

The CTA’s own code of conduct states staff are not allowed to “publicly express an opinion” about potential cases because “that may create a reasonable apprehension of bias.”

Lukacs told CityNews the CTA’s “Statement on Vouchers” shows the federal agency has a pro-airline bias.

“The CTA appears to have already made up its mind on the question without ever hearing the evidence or arguments of the passengers,” he said.

Air Passenger Rights is asking the Federal Court of Appeal for an injunction that would see the CTA’s online statement removed and replaced with a notice for the public that the “legality of the Statement is being challenged in court.” Until the court delivers its ruling, the passenger advocate also want the federal agency “to be prohibited from dealing with COVID-19 related complaints.”

If an airline or travel site is insisting you accept a voucher for your cancelled flight, Lukacs advises you not agree to anything, in person, by phone or online, and to instead initiate a chargeback with your credit card company. But, one couple has learned that may not be enough.

Fighting for honeymoon refund

A potential class-action suit has also been launched by a couple who had their all-inclusive honeymoon cancelled due to COVID-19. The couple was offered a credit, not a refund.

The suit is being filed against Air Canada, Air Transat, Sunwing, West Jet and their wholesale travel groups, this time for travellers whose all-inclusive vacations were cancelled because of the pandemic.

“We’re asking for a full refund, interest on those amounts, and damages,” said Eric Perrier, the lawyer who has filed the suit.

“We were charged for a service that was not provided that seems fraudulent to be honest,” said Janice Beaty.

The couple say Air Canada Vacations refused to refund their nearly $8,000 honeymoon after the airline cancelled their trip because of the pandemic. They were supposed to be at Sandals St Lucia in early May.

“It’s just so upsetting at a time like this when our wedding has been cancelled, now our honeymoon has been cancelled, [and] Paul has been laid off,” said Beaty.

They have filed a chargeback on their credit card, but the couple notes that Air Canada can dispute that – all while the expense collects interest on their card.

In a statement, Transport Canada said: “Questions about credit for cancelled flights should be directed to the Canadian Transportation Agency,” but added, “We are working with airlines to find solutions. Any additional measures relating to airlines would be announced in due course.”

Air Canada did not get back to CityNews after a request for comment. Air Transat, West Jet and Sunwing did not want to comment on the specifics of any legal action. Those airlines are offering a credit valid for 24 months, which they say is appropriate given the extraordinary circumstances.