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News Release

Canadian Transportation Agency Directs Lufthansa to Compensate Ticket Holders

OTTAWA - January 12, 2005 - A third air carrier has been directed by the Canadian Transportation Agency to take corrective measures after it refused to transport persons presenting valid tickets issued by Travel Way Services, a former travel agency located in the Toronto area.

Officials of Travel Way were alleged to have taken in $1.5 million for more than 700 tickets sold in October 2002 without remitting the money to the airlines involved, which include Lufthansa, KLM and Northwest Airlines, Air Canada, British Airways and BWIA-West Indies Airways. Of these airlines, only British Airways and BWIA agreed to accept all tickets issued by Travel Way. Most of the cases were referred to the Canadian Transportation Agency by the Air Travel Complaints Commissioner's Office after it received some 130 complaints dealing with the former travel agency.

The German-based carrier Lufthansa did not oppose a proposed Agency directive set out in a Letter-Decision dated September 29, 2004. The Agency subsequently directed the carrier, in its Order No. 2005-A-8, to provide one of the two following options to ticket holders, unless the carrier can clearly demonstrate that passengers knowingly engaged in fraudulent activities relating to the issuance of the Travel Way tickets:

1. being transported, at no additional charge, to the destinations set out in the original tickets issued by Travel Way within one year of the date of the present Order, upon presentation of the original tickets; or

2. receiving a reimbursement for the tickets.

Furthermore, the Agency directed Lufthansa to pay compensation for any expense incurred by a person adversely affected by the carrier's failure to apply the specific provisions of its tariff.

In a previous decision dated April 29, 2003, the Agency directed KLM and Northwest Airlines to take identical corrective measures after it had determined that, by failing to honour tickets issued by Travel Way, both carriers had not applied their respective tariffs. On June 23, 2004, the Federal Court of Appeal dismissed an appeal brought by KLM and Northwest in respect of this decision.

Air Canada advised the Agency in 2003 that it was reviewing its refusal to accept Travel Way tickets. However, the company was later placed under court-sanctioned creditor protection and the matter was put on hold. When the Stay Order was lifted on September 30, 2004, the Ontario Superior Court of Justice imposed a restriction on claims against Air Canada arising from incidents that occurred before April 1, 2003. Where such claims had a financial impact on the company, the court held that they were to be extinguished. Therefore, the Agency was unable to pursue its investigation of 81 claims against Air Canada in regard to Travel Way.

The Canadian Transportation Agency is an independent Government of Canada quasi-judicial tribunal whose procedures are governed by the rules of natural justice. The application of these rules will ensure that all parties receive fair and equitable treatment.

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For further information, please contact:

Jadrino Huot
Senior Communications Adviser
(819) 953-9957

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