Porter Airlines has been ordered by regulators to pay cash compensation to passengers bumped from its domestic flights, joining the country's two latest airlines which already offer such compensation.
The Canadian Transportation Agency has given the carrier, which operates turboprops primarily from its hub at Toronto City Centre Airport, until July 8 to detail the actual compensation.
Porter currently doesn't have a compensation policy for passengers bumped due to overbooking from flights within Canada, but has provided a $500 voucher for future travel as a "goodwill gesture."
Responding to a complaint from passenger rights activist Gabor Lukacs, the agency found Porter's current policy was "unreasonable."
Passengers are bumped from flights when airlines sell tickets to more people than they can transport, essentially "gambling with the passengers' time," the Halifax mathematician said in an interview.
"Yes, it's something that airlines can do to you, but they have to pay, there's a price attached to it."
While Porter's planes generally fly less full than its larger rivals, some early morning or late evening flights can be full, especially to and from its hub in Toronto.
Lukacs, who has successfully challenged the practices of various airlines, said he's happy for passengers but wishes the federal government took a more active role in protecting consumer rights.
"I think it's embarrassing for the government that a citizen has to do this on a case-by-case basis," he said, noting that compensation for denied boarding is an ongoing issue that's acted on in may jurisdictions, including the U.S., Europe, India, Israel and Turkey.
"It seems as though only Canada is the place where, due to politics and political reasons, the air passenger rights bill is being voted down again and again by the Conservative majority."
He called for federal regulations that can be easily understood by customers and which contain mechanisms for the CTA to hold hearings with sworn testimony before deciding on complaints.
In addition to cash compensation, the airline must rebook the journey on Porter or another airline. Alternatively, the airline must provide a free flight back to the point of origin if bumped passengers no longer want to continue their travel.
The CTA previously ordered Porter to compensate bumped passengers travelling from Canada to the United States.
Porter follows U.S. rules by paying twice the total one-way fare or up to $650, whichever is less, if they arrive at their destination one to four hours later than scheduled, and four times the fare or up $1,300 if more than four hours late.
Brad Cicero, a spokesman for the privately owned airline said it will adopt the same payment rules for flights within Canada. Cicero said plans to update the rules for domestic flights had been put on hold because of the CTA challenge.
"Now that the CTA has approved the same principles for domestic flights, we can move ahead with these procedures," he wrote in an email.
The compensation is the same that is paid by WestJet Airlines (TSX:WJA) for bumping involving flights between Canada and the United States. On domestic flights, the Calgary-based carrier pays the lower amount for delays between one and two hours, and up to $1,300 for delays of more than two hours.
Air Canada was previously ordered to pay cash compensation to bumped passengers on domestic flights. It pays $200/$400/$800 in cash, depending on the length of the delay, for flights within Canada and from Canada to the U.S. It pays up to $650 and $1,300 for bumping delays involving flights from the U.S. to Canada.