“Without headaches or haggling.” That’s how U.S. Transportation Secretary Pete Buttigieg put it in an April statement when describing how airlines are required to refund passengers in new rules that took effect last month. Those rules may spell good news for Canadian flyers too.
The new regulations from the U.S. Department of Transportation mandate carriers to provide prompt, automatic refunds for cancelled or “significantly” changed flights as of Oct. 28, without requiring passengers to initiate the process themselves. Passengers are also entitled to automatic refunds for extra fees if their luggage is substantially delayed and if services like Wi-Fi or inflight entertainment don’t function the way they’re supposed to.
“Prior to this rule, airlines were permitted to set their own standards for what kind of flight changes warranted a refund,” said an April press statement from the DOT. The new mandate defines the circumstances and timeframes in which airlines must provide refunds – within seven days for credit card payments and within 20 days for all other forms of payment.
That certainty, according to experts, is something travellers in Canada lack under the current rules, which still put the onus on travellers to know their rights, and then requires them go through an often long and convoluted process to be compensated. However, Canadians travelling through the United States or on American carriers will be able to take advantage of the hassle-free refund process under the U.S. rules too.
Under the new regulations, those flying through the United States can get a refund if their flight is delayed for more than three hours for domestic flights or six hours for international flights, “regardless of the reason.”
The authority of the Department of Transportation would apply to any flights transiting in or out of the United States, said Geoff White, executive director and general counsel of the Public Interest Advocacy Centre, a non-profit based in Ottawa. For example, if a delayed Air Canada flight lands or takes off from the United States, passengers will still be able to seek an automatic refund.
“You actually don’t even need to be staying in the U.S., it might be just a transit flight through a U.S. city and you would be able to take advantage of this,” said Anita Emilio, vice-president at Envoyage, part of the Flight Centre Travel Group.
Passengers who meet the criteria and don’t choose to rebook – an option the airline can still offer – are automatically refunded on their original form of payment rather than needing to initiate the process.
While passengers in Canada are also entitled to a refund, the rules are not as clear-cut as they are in the United States, Mr. White said. That makes a huge difference for consumers.
That lack of clarity means airlines are left with more room to sidestep their obligations, costing consumers time and money.
One passenger, Olu James, who lives in Toronto, recalls spending nearly a week on and off the phone with Flair Airlines trying to get a refund for a more than 10-hour delay to his flight from Winnipeg to Toronto.
“At first the agent said yes, I would be compensated. I was asked to call back … when I did, they said they wouldn’t be able to compensate me because it was due to mechanical situation,” he said. He followed up with his complaint, but every time he called, the reason would change. ”It was mechanical issues, then it was weather.”
Lots of things can happen that will delay flights, said Mr. White. “But airlines have basically used passengers as their insurance for these events.”
The frustration passengers experience under the rules in Canada is reflected in data collected by the Canadian Transportation Agency. The quasi-judicial tribunal, which oversees federally regulated transportation, has seen a 469-per-cent increase in received passenger complaints between the 2018-19 and 2023-24 fiscal years alone. The CTA currently has a backlog of roughly 80,500 complaints.
Nicholas Lochhead, director of external communications at the CTA said that while Canadian passengers are entitled to compensation, Canada’s Air Passenger Protection Regulations are drawn up in a way that focuses on getting Canadians to their destination quickly.
“As a first principle, the airline’s responsibility is to ensure that passengers complete their itineraries as soon as possible,” he said. The U.S. regulations might end up leaving the burden on passengers to figure out what they want to do about alternative travel, he said.
But Mr. White believes there is definitely room for enhanced clarity in Canada’s current rules. “The U.S. has done a better job of making [things] automatic and guaranteed and more hassle-free,” Mr. White said. “The good news is … if you are involved in a flight delay in the U.S., you’re protected by that. The bad news is, in Canada, we don’t have quite that same level of protection.”