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Economic recovery: Air Canada withdraws from its aid plan with Ottawa

Air Canada will pay $4.5 million to compensate US customers

Air Canada will eventually have to pay US$4.5 million (about C$5.6 million) to compensate thousands of US customers whose flights have been canceled or modified in the wake of the COVID-19 pandemic.

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An agreement was reached between the carrier and the US Department of Transportation’s Air Passenger Protection Office, which initiated legal proceedings against Air Canada because the company was slow to compensate its customers.

This is a standard compensation claimed from an airline, the ministry said in a press release on Monday.

The airline said it had decided to reach an agreement with the US government “to avoid protracted litigation while Air Canada, with stakeholders, focuses on its post-pandemic reconstruction.”

In general, Air Canada does well with this agreement. Last June, the US government launched a $25.5 million lawsuit against the carrier over delays that spanned more than a year to compensate US customers.

US Department of Transportation […] Approved $4.5 million, minus $2.5 million taking into account payments already made to customers who would not have been entitled to such compensation,” Pascal Deere said, speaking to Air Canada.

The DOT recalled that “carriers and other sellers of airline tickets have a legal obligation to compensate consumers if the airline cancels or significantly changes a flight.” The repayment period should be limited to a few weeks at most, with a slightly higher tolerance during a pandemic.

“Air Canada did not act in good faith. On the contrary, almost a year after the May 2020 announcement, Air Canada maintains a non-repayment policy in violation of US law,” US authorities noted.

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The government said it had received more than 6,000 complaints against Air Canada.

The Montreal-based carrier responded by emphasizing that the DOT’s rules on reimbursement period are only “guidelines” and have no legal value.

Today, Monday, Ms. Derry confirmed that he “did not commit any hateful act”, stressing that the Department of Transport “has begun reviewing its regulations in order to align the law with its interpretation.”

It should be remembered that Air Canada also found itself in turmoil by delaying payments to its Canadian customers, and decided to do so only after receiving $5.9 billion in aid from Ottawa.