Air Canada hit with $400K fine for mishandling refunds

Air Canada is being reprimanded for how it dealt with flight cancellations and delays during the flight attendants' strike last year.

On Monday, the Canadian Transportation Agency (CTA) issued a monetary penalty of $426,000 against Air Canada for violating the Air Passenger Protection Regulations (APPR).

This fine comes after the CTA conducted an investigation in relation to the August 2025 flight attendant strike that affected hundreds of the airline’s flights.

The government agency found that between Aug. 15 and 20, 2025, after flight cancellations it said were outside the carrier's control, Air Canada "committed multiple violations of the APPR 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."

According to the APPR, the carrier should have provided those options, free of charge, in situations that are outside of its control, including labour disruptions.

The CTA included a sample of affected passengers in its investigation, which resulted in 71 violations of the APPR.

In an email statement to us, Air Canada said it has filed a notice for review 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."

"The notice is unfounded in law, and we will contest it. 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," stated the airline's spokesperson, Christophe Hennebelle.

"The notice necessarily implies that airlines should be held to a standard which is impossible to achieve. The purpose of the relevant rules is to promote responsible conduct and address inappropriate actions, rather than to apply penalties to goals that cannot reasonably be achieved," he added.

The carrier issued a 72-hour lockout notice and began preemptively cancelling hundreds of Air Canada and Air Canada Rouge flights ahead of the strike on Aug. 16, 2025. Over 55,000 travellers were impacted.

An airline compensation company predicted that the carrier's lockout could generate over $40 million in potential compensation claims and "push the passenger compensation system to breaking point."

A proposed class-action lawsuit has been filed against the company on behalf of Canadian travellers who were impacted by strike-related flight cancellations.

Air Canada isn’t the only airline that has been slapped with a massive fine recently. WestJet was fined $70,000 earlier this month after passengers on a cancelled flight were left without meals or accommodations.