CTA backs away from statement on vouchers not refunds for cancelled flights

The Canadian Transportation Agency is backing away from an earlier statement on flight vouchers, saying its initial position on airlines' right to issue travel credits instead of a refund for cancelled trips is "not a binding decision."

The latest statement could open the door to more refunds from carriers which have cited the agency's stance in denying passenger requests to retrieve cash for services not rendered.

Late last month, the regulator said current rules do not oblige airlines to refund passengers for flights cancelled due to the COVID-19 pandemic. A Tuesday post from the agency reiterates that position, but also stresses customers' right to demand a refund based on the contract between passenger and carrier.

The CTA further notes that travellers who are denied a refund can file a complaint a word left out of the regulator's original statement on vouchers.

The clarification comes in the wake of a slew of questions to the agency, a class action lawsuit claiming airlines have unfairly denied customer refunds and a petition touting more than 13,000 signatures that calls on Ottawa to refuse financial relief to any carrier that does not reimburse travellers.

The transportation authority says two-year vouchers can offer a "reasonable approach" during a "once-in-a-century pandemic" that could end up leaving passengers out of pocket, a risk "exacerbated by the liquidity challenges faced by airlines" as travel plummets following border closures and tanking demand.