Air Canada wins court battle to quash $2,000 payout to passenger for delayed luggage

Air Canada has successfully overturned a Canadian Transportation Agency (CTA) decision requiring the airline to pay a passenger $2,079 for delayed baggage.

After an 11-month court battle launched by Air Canada, Federal Court Justice Michael Manson ruled that a CTA officer’s 2024 decision was unreasonable. The matter has been sent back to the CTA, Canada’s transport regulator, for a new officer to reassess the compensation claim.

The case originates from a 2022 flight Alaa Tannous and his wife, Nancy, took from their home city of Toronto to Vancouver. Their checked baggage arrived one day after they did.

Air Canada originally offered Tannous $250 compensation. Dissatisfied with the amount, he filed a complaint with the CTA.

According to court documents, Air Canada argued the CTA’s order to award Tannous $2,079 was flawed, because the purchases he made to replace the items in his missing suitcase “were excessive, included luxury items,” and some goods were bought after the suitcase was returned. 

In his decision, Justice Manson agreed that the CTA ruling was questionable, because it included a portion of the later purchases.

“The officer’s reasons do not address nor show any common sense on why post-delivery purchases were causally linked to the delay,” he wrote. 

Air Canada told CBC News in an email that it’s satisfied with the judge’s decision. 

Tannous said Air Canada served him with court papers on Christmas Eve in 2024. He said he did not hire a lawyer or participate in the court case, because he felt it was a waste of money and time. 

He declined to comment on the outcome of the case except to point out that it’s still active.

In February, Tannous told CBC News that, during the Vancouver trip, Air Canada said he could spend “a reasonable amount” on necessities needed due to the couple’s missing suitcase. 

“They couldn’t even track the luggage, if it’s in Toronto or, like, on the way,” he said. “I was under the impression, luggage is gone.”

According to court records, Tannous submitted $3,435 in receipts for compensation. Regulations at the time allowed passengers to claim up to approximately $2,350 for delayed luggage.

The judge noted that Tannous made $1,691.98 in purchases before the bag arrived, yet the CTA awarded him more than $2,000 in compensation.

“I felt it’s fair,” said Tannous about the CTA decision. 

Purchases made after the luggage arrived — which raised concerns for the judge — were a pair of sneakers ($433.61) and a personally monogrammed Tumi suitcase ($1,310.40). 

Tannous said the sneakers were bought before he learned that Air Canada had returned the couple’s luggage, and that he purchased the Tumi bag to carry home the new replacement items.

Justice Manson noted in his decision that Air Canada had also argued the CTA officer should have excluded in the compensation amount, “luxury” items purchased by the couple. 

The judge did not comment directly on the matter, but wrote “it is now incumbent on a different [CTA officer] to provide a more reasoned, logical decision in respect of the entire claim.” 

The way the rules currently work, after CTA officers issue rulings in cases, if passengers or airlines disagree with the outcome, they can contest the decision in Federal Court. 

Air Canada said it filed the case against Tannous to seek “guidance on what constitutes reasonable expenses that customers can claim.”