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Supreme Court To Hear Appeal From Airlines On Passenger Compensation

The Supreme Court of Canada has agreed to hear an appeal from multiple airlines that are challenging federal rules that require them to financially compensate passengers for delayed flights and lost or damaged luggage.

Air Canada (AC), Porter Airlines and 16 other carriers will argue to the Supreme Court that Canada's passenger bill of rights violates international standards and should be rendered invalid for flights to overseas destinations.

Launched in 2019, the legal action states that rules requiring airlines based in Canada to compensate passengers exceeds the federal government’s authority by imposing heftier financial requirements for canceled flights and lost baggage than is the industry norm.

In December, a Federal Court of Appeal dismissed the airlines' case, except for one regulation that applies to the temporary loss of luggage.

The Canadian Transportation Agency, which oversees and regulates the airlines industry in Canada, and Canada’s Attorney General argue that the current passenger bill of rights should remain in force as is.

Under the federal rules, passengers must be compensated up to $2,400 if they were denied boarding because a trip was overbooked, while payments for cancelled flights run up to $1,000.

The airlines argue that the financial compensation requirements are excessive and hurt their ability to compete and remain profitable.

It is not clear when the Supreme Court will hear the airlines’ appeal and render a decision.

Air Canada’s stock has risen 19% over the last 12 months to trade at $22.90 per share.