Air Canada is reaching out to selected passengers, offering to settle their compensation cases currently stuck in a huge backlog with the Canadian Transportation Agency (CTA).
But several passengers told CBC News that they were offered far less cash than what they believe they’re owed, and they think Air Canada is using the backlog at the agency as leverage.
The CTA, an independent body that helps resolve disputes between airlines and passengers, says it has a backlog of more than 61,000 cases and that passengers must wait more than 18 months for a resolution.
If passengers settle early with Air Canada, they must drop their case with the CTA.
“These alternative offers, in my view, are a way to try and pressure people into accepting less than what they deserve,” said Samantha Smith, a university student in Edmonton.
She was floored when she received Air Canada’s settlement offer last week: $225 cash or a $400 travel voucher — far less than her $1,483 claim for a flight disruption last year.
“It was insulting,” Smith said. “I felt very angry and just really dismayed.”
Last week, Air Canada offered Samantha Smith via an online platform $225 cash or a $400 travel voucher to settle her compensation claim. The airline says she can also utilize a previously offered $700 voucher. (Submitted by Samantha Smith)
CBC News interviewed five passengers who said Air Canada made settlement offers for less than what they believe they’re owed. Even so, two said they agreed to a settlement — which included a confidentiality clause — rather than wait out the CTA backlog.
Air Canada told CBC News it pays full compensation for legitimate claims and recently started offering lower sums or travel vouchers to wrap up customers’ cases it deems baseless.
Sticking with the CTA
Smith said she believes her case is valid.
In June 2022, her flight from Toronto to Thunder Bay, in northwestern Ontario, was delayed overnight by 14 hours. She said Air Canada told her at the time it would cover her hotel stay.
Smith submitted a claim for $483 for hotel and incidentals, plus the mandated $1,000 payout for a flight delay of at least nine hours that’s within an airline’s control.
Air Canada responded by email that the delay was an “unforeseen operational constraint” and warranted zero compensation. Instead, it offered her a “goodwill” $700 travel voucher. Smith chose not to take it and filed a complaint with the CTA in April.
Smith, a university student in Edmonton, says she’s declining Air Canada’s early settlement offer because the cash portion is $225 — far less than her $1,483 claim for a flight disruption last year. (Samuel Martin/CBC)
Last week, Air Canada sent Smith an email stating that “timelines to resolve [CTA] complaints are expected to be lengthy” and invited her to immediately settle her case via an online platform.
When she went online, Smith was offered the $400 voucher or $225. Air Canada told CBC News this week that she can also still pocket, on top of the offer, the initial $700 goodwill voucher. That was news to Smith, who said vouchers won’t cover her expenses, so she’ll continue her CTA case.
“I think I am angry enough about what’s happened, and it doesn’t feel fair,” she said.
Under federal regulations, airlines must compensate passengers and cover any necessary accommodation for flight delays of three of more hours that are within their control and not required for safety reasons.
Since the rules took effect in 2019, passengers have flooded the CTA with complaints that they’ve been wrongly denied compensation. The agency says that about 82 per cent of the 12,600 complaints it has received since July 17 involved compensation for flight disruptions.
CTA spokesperson Vincent Turgeon told CBC News that passengers are free to settle with their airline at any time.
But consumer advocate and lawyer John Lawford said Air Canada shouldn’t be meddling with the CTA process.
“It’s really kind of unconscionable,” said Lawford, executive director and general counsel of the Public Interest Advocacy Centre in Ottawa.
“It’s an abusive use of an offer to try to get consumers to agree to something just because there’s delays and they may be desperate to get their money back.”
He said he believes Air Canada’s motive is “to reduce their liability over all the claims because there are thousands and thousands.”
Air Canada responds
Air Canada spokesperson Peter Fitzpatrick told CBC News in an email that the settlement offers were designed to reduce the CTA backlog and better manage the airline’s resources.
He said the offers, which customers are free to reject, have generated lots of positive feedback, allow customers to swiftly negotiate a settlement and mainly involve claims Air Canada deems illegitimate.
“Those being offered the opportunity to negotiate … do not have a valid … claim, in our opinion,” Fitzpatrick said.
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Shafik Bhalloo, a lawyer and associate professor at Simon Fraser University’s Beedie School of Business in Vancouver, said it’s common practice for companies to try to quietly and quickly settle customer disputes.
“Why not do what they are doing?” he said. “They do not have to waste money on defending the complaint.”
Also, if passengers take the voucher offer, that guarantees the airline more business, Bhalloo said.
Passenger gets counter-offer
Air Canada passenger Scott O’Donnell, who was offered a settlement deal, said he also believes his claim is valid.
O’Donnell was delayed close to four hours when flying from his home in Edmonton to Toronto in December 2022.
If Air Canada was responsible, he would get $400 — the mandated compensation for flight delays under six hours. Last year, the airline rejected O’Donnell’s claim and blamed “bad weather” — which he disputes.
Air Canada offered to settle Scott O’Donnell’s $400 compensation claim for $150 cash or a $400 voucher. He turned it down. (Trevor Wilson/CBC)
Last week, Air Canada made him an offer: $100 cash or a $200 travel voucher. When O’Donnell clicked the “decline” button online, Air Canada upped the offer to $150 cash or a $400 voucher. But he declined again.
“If I accepted a really cheap offer, I’d be letting them off the hook too easily,” he said. “I think they need to be held to account.”
O’Donnell also questioned Air Canada’s strategy of increasing an offer after a passenger rejects the initial one.
“Somebody might just easily take that first offer and run with it” without knowing they could get a better deal, he said. “I think that’s very misleading.”
Air Canada’s Fitzpatrick said it’s clear from Air Canada’s website that passengers can negotiate, as it calls its settlement system a “dispute resolution platform.”
Passenger Samantha Smith, who chose to ignore her offer and never clicked the “decline” button, says she had no idea she could possibly negotiate a better deal.
“That’s news to me,” she said.
The CTA says it recently revamped its complaints process to make it more efficient. The federal government has proposed new rules to strengthen passenger compensation rights that could take effect next year.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
