Business·GO PUBLIC

'A slap in the face': Little-known rule says airline can keep your money without delivering what you pay for

Air Canada's little-known Rule 30 says if passengers upgrade within economy class but don't receive the extra services they paid more for, they are not entitled to a refund. Passengers are fighting back, demanding refunds and complaining to the airline regulator.

Airlines can upsell passengers without having to deliver services or a refund, experts say

Rick Borsato stands six feet, four inches tall, and was OK with paying more for extra legroom until Air Canada reassigned his seat and kept his money. (Colin Hall/CBC)

A Calgary-area couple is fuming after paying Air Canada hundreds of dollars for an upgraded flight package, then being told a little-known rule allows the airline to keep their money without delivering on what it advertised.

Instead, the airline offered Linda and Rick Borsato 20 per cent off a flight within the next year.

"You're treated like you're an afterthought," said Linda. "'We have your money and sorry you weren't happy. Maybe we'll do better next time. Here's a discount.' That's a slap in the face."

Aviation experts say airlines can upsell passengers without being obligated to deliver or to pay compensation — because the industry's regulator lets them make their own rules outlining their obligations to passengers during a flight.

"It's not really fair," says Prof. John Gradek, who lectures about aviation management at McGill University in Montreal. 

"Unfortunately, that's the conditions by which the Canadian Transportation Agency has allowed the airlines to promote their fares."

Go Public found WestJet, and some U.S. airlines like American Airlines and Delta have similar rules as Air Canada.

Air Canada and WestJet both say they deal with such situations on a case-by-case basis. 

On a trip to Hawaii in April, the Borsatos paid $519 extra to upgrade from the airline's "basic" economy fare to "comfort" economy, which includes advance seat selection. That was the selling point for Rick, who is six feet, four inches tall and wanted more legroom.

Air Canada changed their itinerary three times after the Boeing 737 Max was grounded in March. 

But it wasn't until the Borsatos arrived at the airport on April 13, that they discovered they'd be getting fewer than half of the extras they bought.

The airline didn't deliver on the advance seating, the early boarding or the complimentary alcoholic beverage — though the couple was able to check their first bag for free and got extra travel points.

The Borsatos say an Air Canada agent told them they could get a refund when they returned home.

Little-known rule 

But their refund claim was rejected based on a set of rules that Air Canada wrote itself, and which passengers automatically agree to when they book.

The airline's Rule 30 says services that are part of a fare package, like the one the Borsatos purchased, are "not guaranteed," and "no compensation will be offered for their unavailability."

"I just can't wrap my head around how that happens," Rick said.

"We've paid them for a service and didn't get it, but they've written [this rule] in such a way that they don't owe us anything. What other industry can do that?"

WATCH how Air Canada advertises its Comfort fare

3 years ago
Duration 0:32

The airline won't disclose how often passengers don't get the services they pay for under the various fare packages.

In an email to Go Public, spokesperson Angela Mah says Air Canada "always makes every effort to ensure that services are provided to the best of its abilities."

She added that the "no compensation" clause was included in the rules "for additional clarity." Compensation is handled on a "case-by-case basis," she said. 

Prof. John Gradek of McGill University says because airlines are allowed to write some of their own rules, passengers and travel agents have to read the fine print. (François Sauve/CBC)

After the couple escalated their complaint to Air Canada management, the airline upped its offer by adding a $200 coupon to the 20 per cent discount. They declined that offer.

"We don't want to travel with Air Canada knowing that we can pay for a service that they don't have to provide us and that they don't have to refund our money," Linda said.

Rule 30 is explained in a 116-page document explaining Air Canada's regulations for international travel. (Air Canada)

Dozens of complaints

The Borsatos complained on May 27 to the Canadian Transportation Agency (CTA), the industry regulator which decides whether an airline's rules are reasonable, and has the authority to force airlines to drop or amend rules.

The Borsatos' complaint is among 33 filed over Air Canada's Rule 30 since the CTA began tracking disputes related to the rule two years ago.

In its nine-page response to the Borsatos' complaint, Air Canada says Rule 30 is "reasonable," and that the complaint should be dismissed because the grounding of the 737 Max planes was out of Air Canada's control.

Borsato says he understands Air Canada has to deal with operational issues, but says the no-compensation rule is unfair. (Colin Hall/CBC)

The Borsatos say they understand operational issues come up, but say Air Canada shouldn't be able to keep the money if the purchased services can't be provided.

After Go Public contacted the airline, it agreed to issue a full refund, but only if the Borsatos signed a confidentiality agreement and drop their complaint with the CTA. The couple refused.

Mah, the spokesperson, said "such agreements are common in business during dispute resolutions." 

'Rags to riches'

It's common for airlines to advertise certain perks but not deliver on some or any of them without compensating passengers, according to Prof. Brent Bowen from Embry Riddle Aeronautical University in Prescott, Ariz. 

"Most of the travelling public is not aware of it," said Bowden, who has been running an online study on airline quality for years. 

"This is how the airlines have gone from rags to riches in the past decade … they unbundle everything and don't really reduce the ticket cost to you."

Air Canada says it rarely receives complaints about Rule 30, but the airline wouldn't provide numbers on complaints related to the rule. (Air Canada)

He says occasional travellers should be wary of booking bundled fares that promise — but don't guarantee — extras, because they'll rarely get their money's worth.

Air Canada started offering bundled fare packages in 2003 and it expanded and renamed the packages last year. 

'Not perfect'

Fare packages aren't addressed under Canada's new Air Passenger Protection Regulations, which kicked in July 15.

But they should be, according to Ian Jack of the Canadian Automobile Association, who had input into the new regulations through the government's various consultations with stakeholders. 

The new regulations are "not perfect" and fare packages are "one area for future improvement" Jack said. 

Officials should improve "the way that various fare classes are advertised and… [how] carriers to make clear what you're getting."

Brent Bowen has been researching airline performance quality for years. He says travellers rarely get all the extras advertised in pricier fare bundles. (Submitted by Brent Bowen)

In the meantime, the Borsatos hope the CTA will force Air Canada to drop or modify Rule 30, and want their refund with no strings attached. Their case is still under review. 

"How many people aren't getting what they're paying for?" Linda Borsato asks.

"That's why we pursued this and are following through on it… either way we have nothing to lose now." 

Ian Jack says Canada's new air passenger regulations should require airlines to be clear about what customers are getting when they buy various fare classes. (Stephane Richer/CBC)


Rosa Marchitelli is a national award winner for her investigative work. As co-host of the CBC News segment Go Public, she has a reputation for asking tough questions and holding companies and individuals to account. Rosa's work is seen across CBC News platforms.

With files from Jenn Blair, Ana Komnenic


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