Air Canada to contest $426K fine for failing to refund or rebook flyers, says notice is 'unfounded in law'
Air Canada has been fined $426,000 by the Canadian Transportation Agency (CTA) for 71 violations of the Air Passenger Protection Regulations (APPR) after it failed to refund or rebook passengers during a strike by flight attendants last summer.
However, in a statement to National Post the airline said the notice “is unfounded in law” and plans to contest it.
The CTA summary of enforcement action says the violations occurred between Aug. 15 and Aug. 20 and involved “flight cancellations for a reason outside the carrier’s control.”
The summary says the airline “failed to, at the passengers choice, provide a refund for any unused portion of the ticket, or provide the passenger, free of charge, with a confirmed reservation for the next available flight that is operated by any carrier.”
The CTA also noted : “This enforcement action follows a comprehensive investigation conducted in relation to the August 2025 Air Canada flight attendant labour disruption, which affected numerous flights.” It said a targeted sample of affected passengers was included in the investigation, which resulted in the 71 violations.
However, Air Canada told National Post: “The notice is unfounded in law and we will contest it.”
The airline added: “Air Canada successfully rebooked 200,000 passengers as a result of the labour disruption, which occurred during the busiest summer travel period, when there is limited seat availability.” It said the notice “implies that airlines should be held to a standard which is impossible to achieve.”
Air Canada added that the agency failed to consider measures it took at the time.
“We not only rebooked as many passengers as we reasonably could using some of the best technology available at the time, but also introduced voluntary policies to reimburse approximately $90 million in costs incurred from hotels, meals and expenses including bookings on other airlines or alternative transportation.”
It concluded: “We have filed a notice for review of this notice of violation with the Transportation Appeal Tribunal of Canada on the basis that the CTA is required to take the diligence of airlines and real-world circumstances into account.”
Some 10,000 flight attendants went on strike on Aug. 16 after failing to reach an agreement with Air Canada on a new contract. The action grounded hundreds of planes, stranding thousands of travellers.
The federal government intervened within 12 hours, and the Canada Industrial Relations Board ordered workers back on the job the following day. However, union officials ignored the order and the strike continued even as talks resumed.
The airline started operating again on Aug. 19 after the union announced a tentative deal with the airline, although it said at the time that it would be a week to 10 days before full service returned.
Terms of the new contract include a 12 per cent salary increase for most junior flight attendants, and an eight per cent raise for more senior members. In addition, all members will see a three per cent raise as of April 1, followed by 2.5 per cent in 2027 and 2.75 per cent in 2028.
The new contract also says flight attendants would receive 50 per cent of their hourly wage rate for 60 minutes of ground time on narrow-body aircraft and 70 minutes on wide-body planes. That would rise to 60 per cent in April, 65 per cent in 2027, and 70 per cent in 2028. Unpaid ground work was a major concern leading up to the strike.
In September, Air Canada revealed that the labour disruption resulted in 3,200 flight cancellations and led to a $375-million loss of operating income, and a $430-million revenue hit.
The APPR allows for fines of up to $25,000 per infraction by airline. According to the CTA’s website, in the last four years it has levied fines totalling $5.2 million, including $1.4 million in the last year.
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