Air Canada failed to offer refunds or rebooking, fined more than $400K, regulator says

People wait at an Air Canada check in at Vancouver International Airport in Richmond, B.C., on Sunday, Aug. 17, 2025.

Air Canada has been fined $426,000 by the Canadian Transportation Agency for violating federal passenger rights rules during a flight attendant labour disruption that upended travel plans for thousands of customers last summer.

According to a statement from the Canadian Transportation Agency (CTA) on Monday, Air Canada committed 71 Air Passenger Protection Regulations (APPR) violations between Aug. 15 and 20, 2025, “when it 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.”

Under the rules, airlines must provide those options free of charge when cancellations are outside their control, such as during labour disruptions.

• READ MORE: Arbitrator settles flight attendant wages at Air Canada
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The CTA said the violations stem from a targeted sample of affected passengers reviewed as part of its probe.

In a statement, Air Canada said the notice of violation is “unfounded in law” and that it will contest the penalty.

“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,” the airline said in an email to CTV News on Tuesday.

Air Canada argued the notice implies that the CTA 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 for new bookings on other airlines or alternative transportation, as well as accommodation and meal costs,” it said.

Air Canada has until April 18 to request a review of the penalty before the Transportation Appeal Tribunal of Canada.

The action comes after a labour dispute last August, when more than 10,000 Air Canada flight attendants went on strike, disrupting thousands of flights across the country.

The federal government intervened less than 12 hours after the strike began, invoking the Canada Labour Code to force the airline and the union into binding arbitration. The Canada Industrial Relations Board ordered workers back on the job the following day.

Union officials initially defied the order, with the board later deeming the strike unlawful, even as negotiations resumed between the two sides.

The dispute centred in part on wages, after flight attendants rejected a tentative agreement in September. The matter was ultimately resolved through arbitration, which upheld most of the original deal while increasing first-year raises for some workers at Air Canada Rouge.

The agreement ,which runs until March 2029, includes wage increases over four years and changes to compensation for ground duties, a longstanding point of contention for flight attendants.

With files from The Canadian Press