Passenger rights advocate calls Federal Court of Appeal NewLeaf ruling a “Game Changer” as Court clarifies Flair Air is responsible

(note: see Dec 20th news updates below with @FlairAirlines & @newleaftravel comments Win-win-win for #CDN travellers as a result from @AirPassRightsCA court challenge.)

In a short/precise and yet powerful judgement (PDF file) by the Federal Court of Appeal today dismissing an appeal (2016 FCA 314) by Air Passenger Rights advocate Dr. Gabor Lukacs, the court effectively also clarified and defined the source of protection that Dr. Lukacs has been seeking for passengers. While the reseller, NewLeaf in this case, is not required to hold an air license, ultimately the licensed air carrier, Flair Air in this case, is responsible.

Lukacs explained in an in-depth Skype video interview with this reporter stating [emphasis added],

“The appeal was dismissed but the reasons [see note 1 below for more details] really resolved a very significant issue that now it is clear that passengers will have a recourse against Flair [note: Flair is the “licensed air carrier” in this court case] no matter what. […]

The Federal Court of Appeal made it clear that the fact that NewLeaf is involved in selling tickets still keeps Flair fully responsible for the entire operation. So Flair cannot walk away from any kind of responsibility on the basis that ‘it wasn’t us, it was NewLeaf’. If Flair choose to enter into this kind of relationship with NewLeaf, Flair will have to face the consequences if anything goes wrong.”

Lukacs interview re 2016 Federal Court of Appeal judgement

Lukacs looks at the judgement as a win for passengers because from the passenger’s point of view Flair is responsible and can no longer point at NewLeaf if things go wrong. The ruling makes it clear that Flair is responsible to the passengers whether they have a contract with them or not.

NewLeaf’s reaction to the judgement

NewLeaf’s reaction to the judgement via Facebook (screen capture & Facebook link),

“The federal court of appeal ruling that has dismissed the case between Gabor Lukacs and the CTA/NewLeaf essentially means the courts rule in favour of Canadians continuing to save money on air travel with NewLeaf!!“

It is true that the case has been dismissed but one wonders if both NewLeaf‘s and Flair‘s legal teams have time to really carefully read and digest the full implications of the court ruling yet?

Flair’s reaction to the judgement

At press time, Flair has not issued any press release re this judgement yet and its publicly published “Tariff – Flair Airlines Ltd for NewLeaf flying” remains the July 22, 2016 version.

Given Mr. Chris Lapointe, Vice-President Commercial Operations for Flair stated a few months ago in July 2016 that “it’s not built into our financial model“ for Flair “to foot the bill and take the risk of people being stranded” (see “note 2 financial model” below). One has to wonder if there will be any serious business renegotiations between NewLeaf and Flair? Or is Flair now willing and able to accept the financial risks and responsibilities (e.g. “prescribed liability insurance”) that the Court of Appeal has now clarified it has?

References

note 1: Quoting from paragraph 8 of the judgement (2016 FCA 314) [emphasis added],

“Further, the licenced air carrier [reporter’s note: Flair in this case] will be required to hold the prescribed liability insurance. Put more broadly, licenced air carriers are regulated under the Act when they provide an air service. The involvement of a reseller does not obviate the requirement that licensees comply with all of the obligations imposed upon them under the Act.”

note 2 “financial model”: In a transcript of a conversation between Lukcas and Mr. Chris Lapointe, Vice-President Commercial Operations for Flair Airlines Ltd taken on July 8, 2016 filed with the Federal Court of Appeal (top of electronic page 189 of this Motion Record (PDF file) – Court File No.:A-242-16) [emphasis added],

“Mr. Lukcas: […] And, you know, if Flair is willing to foot the bill and take the risk of people being stranded and look after —

Mr. Lapointe: No, we’re not. We’re not. I’m not — no, no, we’re not. We don’t — it’s not built into our — it’s not built into our financial model, Gabor. We’re not — I’m not saying that we’re going to — we did that once before, it cost us a quarter-million dollars, and we did it and because we did it — because we realized we had to do it, right.“

Dec 16, 2016 Update: Quoting Financial Post “Both sides claim victory after Federal Court of Appeal dismisses NewLeaf case” report by Kristine Owram (with emphasis & reporter’s note added),

““I was thrilled that (the court) actually saw that the CTA had got their ruling correct,” said NewLeaf chief executive Jim Young. “We weren’t worried too much about it in the past because we knew we’d prevail but I was glad to see that it’s now closed.”

Lukacs said his main goal was to ensure passengers are protected, and he was relieved to see the court’s finding that “passengers will still be covered, and so protected, by the terms and conditions of carriage set out in the tariff issued by the licensed air carrier operating the aircraft on which the passengers travel” — in this case, Flair.

“This is a case of losing the battle and winning the war,” Lukacs said. “I was extremely pleased with how concerned the court was about protection of passengers.”

Flair president Jim Rogers did not immediately reply to a request for comment, but he indicated in July that his airline was not responsible for passenger protection since it is only supplying the aircraft. [reporter’s note: This echoes the transcribed phone conversation between Lukacs and Mr. Chris Lapointe, Vice-President Commercial Operations for Flair Airlines described in note 2 above.]

“The contract with the passenger is with NewLeaf and they have a passenger protection plan in place,” Rogers said at the time.“

Dec 16, 2016 10:37pm Update: CBC Calgary has this report of NewLeaf Calgary launch, “Up in the air: Will Canada’s newest air travel company take off? – There will be a third option if you’re flying home for the holidays”

Dec 20, 2016 11:01am update: Quoting CBC News to clarify NewLeaf and Flair Air’s positions, “Flair Air liable for passenger rights, not ticket reseller NewLeaf, judge says” (with emphasis and reporter’s notes added),

“Jim Young, CEO of NewLeaf Travel Company, said he was happy with the appeal’s dismissal. He said Flair Air and NewLeaf had already been operating under the agreement that the airline was ultimately responsible for ensuring passenger rights. (reporter’s note: This clarification by Young is significant.)

“In fact, the tariff that we had published is still the tariff today. We’ve made no changes to it,” Young said.

Tariffs are the agreements between passengers and airlines that lay out rights and responsibilities. The Canadian Transportation Agency recommends airline passengers treat tariffs like a contract, and that they understand the terms and conditions spelled out in them.

Young said if passengers run into an issue such as a flight cancellation or lost baggage, they should first contact his company, NewLeaf, to resolve the issue. Young said the first response is referring passengers to the tariff.

“We operate on behalf of Flair as the passenger reservation system,” he said. “We accommodate them based on the terms and conditions in the tariff.”

Passengers who are not happy with NewLeaf’s response can still file a formal complaint with the Canadian Transportation Agency, but they would do so naming Flair, the airline operator.

Flair Air owner Jim Rogers confirmed his company is ultimately responsible for meeting the tariff agreement with passengers.

He said his company is “pleased to accept the decision as per our tariff.” (reporter’s note: This clarification by Roger is very significant and gets passengers the protection they deserve without ambiguity.)“