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Former U of M prof wants upgrade to Air Canada's compensation plan

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Gábor Lukács proposes Air Canada pay richer passenger compensation.

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Gábor Lukács proposes Air Canada pay richer passenger compensation. Photo Store

Air Canada's latest compensation package for delayed or cancelled domestic flights is still not good enough, says the man who persuaded the Canadian Transportation Agency to look into higher payments to affected passengers.

Reached at his home in Halifax Thursday, G°bor Luk°cs referenced his 47-page submission to the agency and suggested the national transportation bureau reject Air Canada's newest proposal. He submits his own compensation package, or a system akin to the one used in the United States, as a starting point for proper compensation.

"(Air Canada) still wants to pay substantially less than what is paid out in Europe and the U.S.," the former University of Manitoba math professor said via Skype. "What I propose is that for delays up to two hours, there should be $200 cash compensation -- all in cash, let me stress. For between two hours and six hours, it should be $400, and for over six hours, it should be $800."

Last week, Air Canada proposed passengers should be entitled to between $100 and $800 in compensation, depending on airfare and length of delay. The airline submitted passengers delayed for six hours or more be eligible for 200 per cent of the one-way airfare, up to a maximum of $800.

It also proposed that those delayed between one to six hours be eligible for 100 per cent of the one-way airfare, up to a maximum of $400, and Air Canada would pay $100 to $150 in cash or travel vouchers to those forced to wait less than an hour.

In the U.S., twice the airfare up to a maximum of US$650 is paid for delays of one to two hours and four times the fare to a maximum of US$1,300 is paid for delays over two hours.

While Air Canada successfully argued it can still overbook flights and deny compensation in cases when it has to switch to smaller aircraft for operational and security reasons, the CTA ruled the airline's 12-year-old bumping payout rate of $100 cash or a $200 voucher is outdated.

The use of vouchers is something Luk°cs would like to see abolished, as many travellers do not understand the limited-use coupons and are left holding nothing but a promise when they attempt to pay for expenses related to flight delays or cancellation.

Luk°cs says if a voucher system is continued, the value needs to be tripled to that of a cash payout ($300 voucher equals $100 cash currency) to make it worthwhile for passengers.

"There are many cases where a voucher is handed out and never used," Luk°cs said. "My advice to any passenger is that unless you travel a lot or if you're positively sure of what you're getting into, don't take vouchers and ask for cash."

Luk°cs understands his proposed changes to the compensation package will hit Air Canada financially, but counters by saying only 0.09 per cent of domestic passengers are bumped through being denied boarding.

The agency asked Air Canada to explain why Luk°cs's proposal or the system used in the U.S. wouldn't be financially viable, but the airline passed on the opportunity to argue its case.

"Basically, they're trying to be cheap. I made a calculation of the financial impact, and we are talking about maybe 20 to 30 cents per passenger in terms of the difference," Luk°cs said.

"The agency (found), and Air Canada did not dispute this, that increasing the passenger compensation would have no adverse impact in terms of Air Canada's competitive position or any substantial financial burden."

 

-- with files from Canadian Press

adam.wazny@freepress.mb.ca

 

Republished from the Winnipeg Free Press print edition July 5, 2013 B8

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