Air Canada Fuel Surcharge Class Action Approved

Filed Under: Air Canada

Who knew I would be able to put my lawyer hat on so early in my travel blogging career? But it’s only been a week or two, and here I am, bringing you my hot take on the latest major lawsuit to hit the Canadian airline industry.

In short, fuel surcharges seem to be a legal headache that just will not go away for Air Canada. On Monday, a Quebec Superior Court Judge certified a class action against the airline for allegedly charging fuel surcharges over and above the amount the amount that would offset the volatility of fuel pricing, which is what the surcharge was intended to do.

This isn’t the first time Air Canada has been faced with a class action on fuel surcharges; Quebec courts have previously approved another class action around fuel surcharges on paid tickets, as well as a class action concerning fuel surcharges on tickets purchased with Aeroplan points redemptions. For those who are wondering, class actions are often approved faster in Quebec than in other provinces, which is why it is often the jurisdiction of choice for these things.

The new class action is focused on international flights, and cites some examples of Air Canada allegedly charging fuel surcharges that exceeded the total cost of fuel for the flight!

But don’t start counting those sweet, sweet class settlement dollars yet.

First of all, the class has been defined in a limited way that won’t include most Air Canada passengers. Only Quebec residents who purchased international flights outside the US, Mexico, and the Caribbean between April 2012 and November 2014 will be eligible as class members.

Secondly, the class certification or approval stage has a relatively low bar, and the test is focused on the common characteristics of the proposed class, not on the allegations themselves.

To date, all that has really happened is that the applicants, in this case George and David Itzkovitz, have convinced the judge that there is a well-defined class of persons affected by the alleged wrongdoing of Air Canada such that they should be permitted to pursue a remedy together in a single action, led by a representative plaintiff, rather than individually. None of the allegations of overcharging have been proven.

Third, even if the allegations are proven or seem likely to be proven, the action has a long way to go. Although most lawsuits settle in advance of a trial, the pace of litigation in Canada is extremely slow – where I practice, even a relatively uncomplicated action can take upwards of five years to get to trial – and rounds of document production, applications, and discussions are likely before any settlement is reached.

Finally, class settlements are, as a general rule, pretty small on a per-class-member basis.

One of the examples of misconduct set out in the action is a flight to Paris in which economy passengers were allegedly overcharged by $163 per seat. There is no indication that level of overcharging was the norm, and once lawyers’ fees are deducted, (class actions are usually done on a contingency basis in which counsel gets a percentage of the final judgment or settlement, plus disbursements), there probably won’t be all that much left for the individual passenger.

It is worth noting that the real issue that seems to be driving the class actions against Air Canada on fuel surcharges is that the airline gave passengers a lot of information about them, albeit buried deep in the Ts&Cs. Air Canada set out, at least for some periods of time, the criteria or formula that it would use to calculate fuel surcharges, and was therefore bound to charge them in accordance with that formula.

If the airline had given itself more wiggle room by leaving the calculation in its discretion, there might be less scope for this kind of class action, but by the same token, we as passengers would be less well-informed about where our money is going.

Comments
  1. The whole thing about class action settlements on a per class member basis being lower than the actual harm is BS. Attorneys’ fees in class actions always seem insane, until you factor in how much it would cost each class member to file their own suits individually. The bigger issue in class actions like these is preventing big companies with the power to force us to pay for things like exorbitant fuel surcharges every time we fly. Even if you don’t qualify as a class member, it’s hard to imagine even a settlement in this case wouldn’t put a stop to AC’s fuel surcharge practices, thus benefiting all of us as consumers. Also, even if you do qualify as a class member, think about how much it would have cost you to hire your own lawyer to deal with this issue (short answer: far more than you would ever receive in damages as an individual class member). In a class action, the lawyers fees are a bargain in comparison.

  2. I remember the baloney they told us about record high fuel prices being the reason for fuel surcharges. Then the price dropped to a record low, yet they kept as ancillary revenue. It might have started as a legit reason, but now it is a scam.

  3. “…power to force us to pay for things like exorbitant fuel surcharges every time we fly.”

    Wow, you’ve been “forced” to purchase tickets and fly? That has to be a little unsettling.

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