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News Release

Travel Way: Canadian Transportation Agency Directs KLM and Northwest Airlines to Compensate Ticket-Holders

OTTAWA - April 30, 2003 - The Canadian Transportation Agency has directed KLM and Northwest Airlines to take corrective measures after these carriers refused to transport persons presenting valid tickets issued by Travel Way Services, a Toronto-area travel agency, two officials of which were charged last fall with fraud.

Officials of Travel Way Services are 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 Air Canada, British Airways, BWIA-West Indies Airways and KLM / Northwest. Of these airlines, only British Airways and BWIA agreed to accept all tickets issued by Travel Way.

The Agency, in its Decision No. 232-A-2003, determined that, by refusing to transport persons presenting tickets issued by Travel Way, KLM and Northwest failed to respect certain terms and conditions of carriage which are contained in their tariffs, contrary to the Air Transportation Regulations.

"The Agency (...) is not in a position to determine whether the tickets issued by Travel Way were 'improperly issued' within the meaning of the carriers' tariffs. Accordingly, the Agency is of the opinion that the tickets issued by Travel Way are valid," the decision states.

Since the travel dates have passed for all of the tickets issued by Travel Way which were not honoured by KLM and Northwest, the Agency directs these carriers to provide ticket-holders with two options, unless the carriers can clearly demonstrate that specific ticket-holders knowingly engaged in fraudulent activities relating to the issuance of the Travel Way tickets:

(1) transport the ticket-holders, 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 Agency's decision, upon presentation of the original tickets; or

(2) reimburse the cost of the tickets.

Furthermore, the Agency directs KLM and Northwest to pay compensation for any expenses incurred by persons adversely affected by the failure by these carriers to apply the specific provisions of their tariffs.

The Agency notes in its decision that, at the time that persons purchased the tickets in question, that is, during the period between October 14 and October 19, 2002, Travel Way was a travel agency accredited by the International Air Transport Association (IATA) to sell and issue international airline tickets.

The case was referred to the Canadian Transportation Agency by Canada's Air Travel Complaints Commissioner, Liette Lacroix Kenniff, after her Office received some 100 complaints dealing with Travel Way. The Agency wrote to KLM and Northwest on December 19, 2002, directing them to "show cause" why it should not issue a formal order in this case.

The Canadian Transportation Agency is an independent federal 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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