Lost baggage, delays, overbooking: Airlines must compensate passengers, says Supreme Court

Supreme Court ruled: Airlines must pay increased compensation to passengers on international flights for lost baggage, delayed or denied boarding due to overbooking.

Friday's decision was unanimous and ends an appeal filed in 2019 by nearly 20 airlines worldwide, including Air Canada, United Airlines and Air China.

These companies challenged new, more restrictive rules from the Canadian Transportation Agency (CTA), established in 2019, that went against the Montreal Convention they signed in 2001, which set limits on damages payable to consumers.

In particular, the airlines argued that the new regulations constituted a form of “action for damages” that exceeded the limits permitted by the Montreal Convention.

This argument was first rejected by the Federal Court of Appeal, which on the other hand struck down the provision for temporary loss of baggage.

The Supreme Court upheld the Federal Court of Appeal's decision on Friday, which affirmed that there is no “action for damages” but that the system is “very similar to the consumer protection regime that applies parallel to the Montreal Convention . . .

Rules established by the CTA provide that passengers denied boarding due to overbooking will be compensated up to $2,400.

In some cases that lead to delays and flight cancellations, the amount can be up to $1,000 and up to $2,350 for lost or damaged baggage.