To Travel Voucher or Not

The answer may very well be to ask for a gift card instead.

In light of the current Covid-19 crisis, Canadian airlines have cancelled vast numbers of flights, leaving many Canadians out of pocket.

To compound this issue, confusing messaging from the Canadian Transportation Agency (CTA) and airlines insistence on reimbursement of customers through travel vouchers have further muddied the waters on whether customers are entitled to a refund. Statements from the CTA are just that: statements and not law or legislated change to Passenger Rights.  Despite this, the airlines and credit card companies are pointing to them in their defense when refusing to issue lawful refunds.

To bring some clarity, here is break down of the situation, what your rights are, and whether or not you should accept a travel voucher instead of getting ready to fight for a refund.

What Is an Airline Travel Voucher?

The impact the Covid-19 crisis has had on the airline industry is undeniable. Thousands of flights have been cancelled, throwing ordinary people’s travel plans into disarray.

To make matters worse, many airlines have responded to the crisis by refusing to process refunds for flights, offering travel vouchers instead. Even though they are breaking the law, the CTA has turned a blind eye, leaving travellers to fend for themselves.

The exact nature of these vouchers varies between airlines. However, they generally offer the cancelled flight’s cost to be put towards a future booking. Initially, these vouchers also had a 24-month expiry date on them.

What has the Canadian Transportation Agency said?

Unfortunately, the messaging from the CTA has been decidedly mixed. Initially, in a statement released on March 2020, the CTA cast doubt on passengers right to a refund and claimed that airlines would go bankrupt if forced to refund their customers.

Neither of these statements was followed by any supporting evidence, and the Federal Court of Appeal found that the ‘Statement on Vouchers’ issued by the CTA was not legally binding.

Under the Canada Transportation Act, airlines must provide “refunds for services purchased but not used … either as a result of the client’s unwillingness or inability to continue or the air carrier’s inability to provide the service for any reason.”

Therefore, the questions beg:

Should I Accept My Travel Voucher?

Whether you accept your travel voucher depends on your circumstances and the terms offered by the issuing airline. However, before accepting, there are some pertinent questions worth asking:

How long is my travel voucher valid for?

Initially, many airlines issued vouchers were valid for up to 24 months, although some airlines have since removed this expiry date. If you have opted for the travel voucher, please be aware that it may take 6-8 weeks before it converted into one.

What does my voucher cover?

Some vouchers will only cover the airfare cost, rather than the total cost of the flight.  This means you may lose money on the voucher when supplemental charges, such as taxes, are not returned. You may also have to spend extra money to cover the taxes levied to your new destination

What airlines can you fly?

Most airlines are members of global airline alliances, allowing them to book flights through partner airlines. Always check your voucher to ensure you are not restricted to just the issuing airline.

Where can you fly?

It’s also important to check that there are no restrictions on what destinations you can choose when spending your voucher in the future. If you know you will not be flying to the same destination and with the same routing, you are best off asking the airline to convert the voucher into a “Gift Card” so that you may use the full amount towards any of your future trips.

When can I use my travel voucher?

If you’ve checked all of the details above and are happy with your voucher, feel free to accept it. However, if any of the terms and conditions aren’t to your satisfaction, you have other options.

Getting a Refund or Small Claims Court

There are two principal ways of getting a refund on your cancelled ticket. The first option is to initiate an ‘internal chargeback’ with your credit card company.

As per the Canada Transportation Act, you are entitled to a refund if a flight is cancelled because of the “air carrier’s inability to provide the service for any reason.”

If your credit card company is unwilling to cooperate, you can also initiate a ‘statutory chargeback’. A statutory chargeback takes advantage of your legal rights under your local province’s statute.

The process for initiating a statutory chargeback depends on which province you reside in. Thankfully, you can find a full step by step guide to statutory chargebacks on the Air Passenger Rights website or if you have booked travel with The Travelogist, we can assist you with determining the best way to move forward, including these solutions or taking action through small claims court.

In the future, travellers should consider European legacy carriers if they are within their options since they are regarded as the “Gold” standard in terms of passenger rights. These airlines have abided by the mandated EU law and their customers have been issued full refunds with no questions asked.

The future of the travel industry is an ever changing one. The terms, conditions and laws protecting consumer rights will undoubtedly change and consumers are advised to keep a close watch on how they evolve when making their selection on how and with who they book their travel.