COVID-19: Do airline companies have the obligation to reimburse?
Since the beginning of the COVID-19 pandemic, several questions relating to the fate of the obligations of a party to a contract have had to be addressed. A great part of the answers to these questions resided in the notion of force majeure, a legal concept to which the current pandemic could probably correspond.
As we mentioned in our March 23rd article, force majeure allows a debtor to be released from its contractual obligations, when certain criteria are met. However, can an airline company refuse to reimburse the ticket price for customers who have had their flights cancelled due to COVID-19?
While this issue is of great importance to many Canadians, because of the high cost of airline tickets, but also because the major players in the transportation industry still do not seem to have positioned themselves as to whether refunds would be granted or not.
On March 25th, the Canadian Transportation Agency published a press release in which it stated, with particular reference to the Canada Transportation Act and Air Passenger Protection Regulations, that “the legislation, regulations, and tariffs were developed in anticipation of relatively localized and short-term disruptions. None contemplated the sorts of worldwide mass flight cancellations that have taken place over recent weeks as a result of the pandemic” [1]. To compensate for the massive cancellation of flights, the Agency recommended to airlines that it considered a reasonable solution, namely to provide their customers with travel credit valid for the next 24 months, this measure having been adopted by most Canadian air carriers.
However, the application of this measure by air carriers could trigger legal consequences, especially when put in relation with the provisions of the Civil Code of Québec.
Indeed air carriers are bound by an obligation of result [2]. Proof of an event of force majeure making it impossible to fulfill their obligation is the only way to be released from their obligation. Thus, when an air carrier is forced to cancel a flight due to force majeure, it must, by applying this legal regime, reimburse the prices paid by customers for services that have not been provided [3].
Although reimbursement is the rule applying to such a case, it does not seem that this is the solution contemplated by the actors of the air transport industry for the moment. Consumers could nevertheless benefit from the reimbursement of their ticket via a chargeback request to the issuer of the credit card with which they made the purchase, via travel insurance or even through the Fonds d’indemnisation des clients des agents de voyages, if applicable.
It will therefore be interesting to see how the courts will apply the legal regime of force majeure to the situation of air carriers only offering credits to their customers. Mass reimbursements by air carriers would no doubt have a considerable effect on an industry that is already struggling due to the current circumstances. Already three requests for class actions have been filed across the country by citizens with plane tickets or travel packages that have been cancelled due to the COVID-19 pandemic.
[1] https://www.otc-cta.gc.ca/eng/statement-vouchers
[2] 2037 CCQ
[3] 1694 CCQ