Cancelled Flights and Lack of Refunds lead to Class Actions

By Mariam Rajabali

In the flood of litigation during the coronavirus pandemic, there has been an increased number of COVID-19 related class actions. Whether the targets are long-term care homes, retailers, insurance companies or airlines, COVID-19 has gone beyond impacting everyone’s day-to-day life. Now, it has forced consumers to consider their loyalty to their favourite brands and business relations. At the beginning of the pandemic, many businesses were unaware of how to manage their operations while satisfying their customers. Some of the choices made, however, created unhappy consumers and have led to a variety of class action suits.

COVID-19 Flights Refund Class Action

In the early weeks of the pandemic when travel restrictions were imposed, airlines offered future credit to passengers rather than refunds on tickets purchased. Disappointed consumers like Janet Donaldson banded together to launch an airline ticket refund class action. The proposed class action was filed at the Federal Court on March 27, 2020. Amongst the proposed defendants are Air Canada (including Air Canada Rouge), WestJet, Sunwing, Air Transat and Swoop. 

Without notice to its customers, many airlines unilaterally changed their cancellation policies.  Previously, they were issuing refunds for flights that were cancelled by the airline. As customers began reaching out to the airlines, they quickly found airlines changing their terms and issuing future credit instead of cash. For customers who depended on the cash reimbursements due to financial constraints caused by the pandemic, this was particularly devastating. 

Janet is among hundreds of thousands of people around the world who could be affected by the airlines’ decisions not to reimburse passengers for their cancelled flights. In Janet’s case, she lost $361 for a Vancouver-New York round trip, but many passengers lost much more. Katie Gillis and her wedding party, for example, collectively lost $57,000 through Sunwing.

The proposed class action is on behalf of “persons residing anywhere in the world” who, before March 11, 2020, purchased flight tickets with any of the listed defendants for a flight between March 13, 2020 and the date the federal government lifts all travel advisories for COVID-19. 

A Worldwide Movement 

While the proposed class action already involves hundreds of thousands of people around the world, several other firms have begun filing similar actions. Just within Canada, another class action was launched specifically targeting Air Transat in Quebec, for the same reason. Over 32,000 Canadian citizens have called “upon the Government of Canada to require airlines and other carriers under federal jurisdiction to allow customers whose trips have been cancelled due to the current pandemic to obtain a refund”. Another 72,000 people signed the same petition through www.change.org.

Around the world, class actions have been filed against several airlines including American Airlines, United Airlines and Delta Airlines via Hagens Berman Sobol Shapiro LLP, Southwest Airlines via Tycko & Zavareei LLP and British Airways via SPG Law. Toronto firm Koskie Minsky is commencing a class proceeding against international airlines regarding the same cancellation policies. The airlines include Aeromexico, Air France, Alitalia, British Airways, Cathay Pacific, Delta, Etihad Airways, El Al, Emirates, Lufthansa, Nippon Airways, Southwest Airlines, TAP Portugal, United Airlines, Qantas, Aer Lingus and Ryanair.

In response, the United States Department of Transportation set out regulations that requires airlines to refund passengers for cancelled flights. The European Union followed suit and have similarly instructed airlines. The Canadian government, however, has taken a very different approach. 

CTA’s Statement on Vouchers

Two days before the class action on refunds was filed with the Federal Court, the Canadian Transportation Agency (CTA) announced that vouchers could be an acceptable form of compensation instead of cash refunds, provided that they do not expire after an “unreasonably short period of time”. Many airlines justified their lack of refunds based on the CTA’s “Statement on Vouchers”. The CTA even went as far as to specify that “24 months would be considered reasonable in most cases”.

Nevertheless, given the airlines’ use of the statement as justification to deny passengers their refunds, a consumer advocacy group, Air Passenger Rights, attempted to obtain a mandatory interlocutory injunction of the CTA’s statement on refunds. More importantly, that statement gives the public a false understanding of their rights to be reimbursed and the misinformation further adds barriers to justice for consumers. Even so, the Federal Court of Appeal dismissed the request for the injunction in May 2020. 

The CTA has since clarified that their statement is not legally binding. As part of this clarification, they explicitly mentioned that while the suggestion of vouchers can be appropriate given the circumstances, it does not “affect airlines’ obligations or passengers’ rights”. They also noted that “passengers can still file a complaint with the CTA”, a statement that was missing from the initial Statement on Vouchers. 

Consumers will have to await the outcome of the certification hearing in the Federal Court action, scheduled to take place on November 2, 2020, at 9:30AM PST via Zoom video conference. In the meantime, we encourage potential class members to reach out to EvoLink Law if they would like to receive updates about the proposed class action or contact the Class Action Clinic if they need assistance in navigating the process.