Analysis and findings

[34] Subsection 111(1) of the ATR provides that:

All tolls and terms and conditions of carriage, including free and reduced rate

transportation, that are established by an air carrier shall be just and reasonable

and shall, under substantially similar circumstances and conditions and with

respect to all traffic of the same description, be applied equally to all that traffic.

[35] To assess whether a term or condition of carriage is “unreasonable,” the Agency has traditionally

applied a balancing test, which requires that a balance be struck between the rights of passengers

to be subject to reasonable terms and conditions of carriage and the particular air carrier’s

statutory, commercial and operational obligations. This test was first established in

Decision No. 666-C-A-2001 (Anderson v. Air Canada) and was recently applied in

Decision No. 150-C-A-2013 (Forsythe v. Air Canada).

[36] An air carrier sets its terms and conditions of carriage on the basis of its own interests, without

any input from passengers. These terms and conditions may have their basis in purely

commercial requirements, and as such, there is no presumption that a tariff is reasonable.

[37] When balancing the passengers’ rights against the carrier’s obligations, the Agency must

consider the whole of the evidence and the submissions presented by both parties and make a

determination on the reasonableness or unreasonableness of the term or condition of carriage

based on which party has presented the more compelling and persuasive case.

[38] Swiss argues that an air carrier cannot be expected to transport passengers for a loss, as Swiss

has obligations to its employees and stakeholders. On the other hand, some of the complainants

argue that there is no consumer protection in Tariff Rule 5(F).

- 8 - DECISION NO. 239-C-A-2013

[39] The Agency has considered the submissions of the parties on this matter, and finds that the

complainants have presented a more compelling argument. Specifically, there is no protection

afforded to consumers under Tariff Rule 5(F), as Swiss can revoke tickets that it claims to

involve fares that have been erroneously quoted by reason of “technical failure.” Also, the

Agency finds that the obligation that Swiss alleges it has to honour to its employees and

stakeholders does not outweigh the interests of the complainants and other consumers to be

subject to reasonable terms and conditions of carriage.

[40] While Swiss argues that it should not be obligated to provide services for compensation that is

obviously erroneously published and commercially unfeasible, the Agency notes that Swiss

provides no submissions concerning the effect that honouring the erroneously posted fares would

have on Swiss’ commercial obligations. The Agency also notes that Tariff Rule 5(F) provides no

time period within which Swiss may cancel a ticket that has been erroneously quoted due to

technical error, nor does that Rule specify examples of situations that may lead to such an error.

Furthermore, Rule 5(F) imposes no obligations on Swiss to ensure that it takes reasonable steps

to prevent the issuance of erroneous fares.

[41] The Agency notes that it took Swiss six days to discover the erroneous fares, leaving at least one

complainant with less than three weeks to make alternative travel arrangements.

[42] Considering the above, the Agency is of the preliminary opinion that the broad, undefined

authority that Tariff Rule 5(F) affords Swiss is disadvantageous to consumers. Swiss has not

demonstrated to the Agency’s satisfaction that Rule 5(F) considers or balances the passengers’

rights to reasonable terms and conditions of carriage with Swiss’ statutory, commercial and

operational obligations. In light of the foregoing, the Agency finds, on a preliminary basis, that

Rule 5(F) is unreasonable within the meaning of subsection 111(1) of the ATR.