Airlines Challenge Passenger Rights Rules

Air Canada and Porter Airlines are among hundreds of carriers collectively trying to quash new passenger compensation rules that start to come into effect July 15. The International Air Transport Association (IATA), which represents 290 airlines and 17 other applicants are asking the Federal Court of Appeal to strike down the rules announced by the Canadian Transport Association (CTA) last month. The court application argues the tough new schedule of fines and penalties contravene the Montreal Convention, the international treaty that governs the conduct of air transportation companies worldwide.

The CTA says it will respond to the application next week but it would not tell Bloomberg what the response would say. Starting July 15, bumped passengers will be eligible for up to $2,400 in compensation and lost baggage will cost airlines up to $2,100. Starting in December, a sliding scale of fees for flight delays and cancellations will come into effect. The Air Transport Association of Canada calls the new rules “outrageous” while passenger rights activist Gabor Lukacs says the rules are so full of loopholes as to be unenforceable. The application also challenges the two-tiered approach to penalties. Under the rules, smaller airlines (determined by passenger numbers) pay much lower penalties than large carriers for the same infractions.