Travel industry pressured regulator for reimbursement for flights at start of pandemic: emails
The relationship between Canada’s airline watchdog and the travel industry is under scrutiny following the publication of emails from the early days of the COVID-19 pandemic in which industry executives urged regulators to support their position against issui
The relationship between Canada’s airline watchdog and the travel industry is under scrutiny following the publication of emails from the early days of the COVID-19 pandemic in which industry executives urged regulators to support their position against reimbursement of passengers, a few days before the Canadian Transportation Agency. only that.
Disclosed under a Federal Court of Appeal order, a March 22 letter from Transat CEO Jean-Marc Eustache asked CTA to issue a statement anticipating complaints and lawsuits amid thousands of flight cancellations at the start of the pandemic.
“Clarify that the uncontrollable nature of the crisis means that no refunds to passengers are required,” he asked. The clarification would also allow credit card companies to “decline customer chargeback requests.”
Three days later, CTA issued a statement that airlines could generally issue flight credits or vouchers to customers whose flights had been canceled due to the pandemic, rather than refunding them.
Eustache’s letter followed an email and an extended phone conversation between another Transat executive and then senior agency manager Marcia Jones on the same subject four days earlier.
“I had a long call tonight and have a better understanding of the concern,” Jones told CTA CEO Scott Streiner in an email on March 18, 2020.
The Association of Canadian Travel Agencies also wrote to the regulator asking for help in “preventing credit card chargebacks.”
CTA’s March 25 statement that flight credit rather than refunds is a “reasonable approach” to passengers left behind by canceled flights sparked a public backlash and thousands of complaints from the airline. transport.
Gabor Lukacs, chairman of the air passenger rights group, said behind-the-scenes communication between the leadership and the quasi-judicial body undermines the agency’s independence.
“The agency has clearly acted here to protect the financial interests of the airlines, which was not their job,” he said.
“Ensuring that airlines are profitable is far from the agency’s mandate.”
CTA says it holds regular discussions with stakeholders that fall within its regulatory mandate, such as industry and consumer protection groups.
“The information obtained during these exchanges contributes to a good understanding of the possible impacts of its actions. This does not undermine the impartiality of the agency,” she said in an email.
The aim of the correspondence was to fully inform CTA of a rapidly evolving situation and to seek advice on new transport legislation, said Transat spokesperson Christophe Hennebelle.
The travel agency association said it wanted to “buy time” until more information on the pandemic emerges, with agents caught between airlines, cruise lines and hotels. on the one hand and consumers on the other.
“We are pleased that the Canadian government and the CTA at the time listened to our concerns and priorities,” President Wendy Paradis said in a statement. The association is not in regular contact with the agency, she added.
The Bloc Québécois asked Thursday for an independent inquiry into the independence of the regulator.
“We suspected for a long time that the agency had a problem of regulatory capture, now we have proof of it”, declared in French the Bloc member Xavier Barsalou-Duval in a press release.
“The emails from the airlines and the CTA make it clear that the latter failed in its mission to protect air passengers by drafting the message regarding the credits.”
The newly leaked correspondence comes seven months after advocates and opposition MPs said emails between the Federal Transport Ministry and the CTA regarding passenger refunds initially questioned the regulator’s independence.
Emails filed with the House of Commons transport committee in May revealed that senior officials last year were in frequent contact about the agency’s public stance on flight vouchers, which airlines have said. cited several times to justify the denial of reimbursement for passengers.
Lukacs said the communication, combined with the latest batch of email disclosure, suggests undue pressure on the independent body from the travel industry and Transport Canada.
During the first months of the pandemic in the United States and several countries in the European Union, governments have deployed billions of dollars in financial support to the airline industry while demanding reimbursements for denied flights. It took over a year for the first full-fledged bailout and repayment agreement to come to fruition in Canada.
Since April, several airlines, starting with Air Canada, have accepted aid from Ottawa and agreed to reimburse customers – although advocates say the right already exists.
CTA’s statement on vouchers – which was revised in April to make it clear that it did not change airlines’ obligations or passenger rights under carrier-customer contracts – amounted to a “detrimental view” , said Sylvie De Bellefeuille, lawyer at Option consommateurs.
“It was too limited to ignore the fact that there were other laws that could apply that could have helped people get their refunds,” she said.
“We are not sure why CTA made this decision, but it is clear that there has been some pressure from the travel industry to accept these vouchers.”
Her advocacy group also wrote to CTA in April 2020. “We have never had any answers to our concerns,” she said.
Advocates said consumer protection laws in most provinces allow customers to be reimbursed for services never rendered.
The CTA said it applies federal rules and does not comment on provincial laws.
Passengers lodged 16,200 complaints with CTA between March 2020 and May 2021, of which more than 9,700 relate to refunds, the regulator announced last month.
This report by The Canadian Press was first published on December 16, 2021.
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Christopher Reynolds, The Canadian Press