Air Canada must increase payouts on bumps

Air Canada has been ordered to boost compensation to passengers who are bumped from overbooked domestic flights.

Right now, Air Canada pays either $100 in cash or gives a $200 travel voucher to bumped passengers. But the Canadian Transportation Agency has now ruled the amount is unreasonable in cases that are not due to operational and safety reasons. So, Air Canada now has 30 days to submit new compensation guidelines. The agency is siding with a former University of Manitoba math professor who has challenged several airline industry practices.

He says that passengers should be compensated between $200 and $800 cash depending on the length of the delay. The agency says the airline must choose between this model and the one used in the U.S., which pays up to $1,300 in some circumstances.