Air Canada offering cash or vouchers to settle compensation claims it says are baseless

Air Canada is reaching out to selected passengers, offering to settle their compensation cases currently stuck in a huge backlog with the Canadian Transportation Agency (CTA).

But several passengers told CBC News that they were offered far less cash than what they believe they're owed, and they think Air Canada is using the backlog at the agency as leverage.

The CTA, an independent body that helps resolve disputes between airlines and passengers, says it has a backlog of more than 61,000 cases and that passengers must wait more than 18 months for a resolution.

If passengers settle early with Air Canada, they must drop their case with the CTA.

"These alternative offers, in my view, are a way to try and pressure people into accepting less than what they deserve," said Samantha Smith, a university student in Edmonton.

She was floored when she received Air Canada's settlement offer last week: $225 cash or a $400 travel voucher — far less than her $1,483 claim for a flight disruption last year.

"It was insulting," Smith said. "I felt very angry and just really dismayed."

CBC News interviewed five passengers who said Air Canada made settlement offers for less than what they believe they're owed. Even so, two said they agreed to a settlement — which included a confidentiality clause — rather than wait out the CTA backlog.

Air Canada told CBC News it pays full compensation for legitimate claims and recently started offering lower sums or travel vouchers to wrap up customers' cases it deems baseless.

Smith said she believes her case is valid.

In June 2022, her flight from Toronto to Thunder Bay, in northwestern Ontario, was delayed overnight by 14 hours. She said Air Canada told her at the time it would cover her hotel stay.

Smith submitted a claim for $483 for hotel and incidentals, plus the mandated $1,000 payout for a flight delay of at least nine hours that's within an airline's control.

Air Canada responded by email that the delay was an "unforeseen operational constraint" and warranted zero compensation. Instead, it offered her a "goodwill" $700 travel voucher. Smith chose not to take it and filed a complaint with the CTA in April.

Last week, Air Canada sent Smith an email stating that "timelines to resolve [CTA] complaints are expected to be lengthy" and invited her to immediately settle her case via an online platform.