We just got back from travelling with our kids and one was still in a car seat (thankfully this is our last trip with a car seat!) The only issue with our car seat (an almost 4 year old graco) is that the armrest of the seat next to it can't be down. We always have the kids in window seats with one of us next to them so the arm rest not coming down isn't an issue.

This has pretty much been our experience every time we've flown with this particular carseat. We've never flown with the carseat rear-facing, but I can't see how it would possibly fit. (Plus, for a 20 month old this wouldn't be an issue.)

The only thing any airline employee has ever check on the seat is the transport Canada sticker. No one has ever tried to measure any part of it.

All that being said, who knows what Air Transat will do - charter airlines don't always re-act the same as regular airlines.