Air Canada Sues Passenger Over Delayed Bag Compensation Fiasco

When you’re traveling with an airline and your checked bag is delayed or missing, you’re typically entitled to reimbursement for any reasonable expenses incurred as a result of this, like buying toiletries, replacement clothes, etc. The catch is that both airlines and passengers seem to have very different interpretations of what is reasonable.

Along those lines, there’s currently an interesting situation in Canada, as regulators have ordered the airline to pay a passenger $2,079 for expenses resulting from a delayed bag, but now the airline is suing (all amounts in this story will be listed in CAD rather than USD, since that’s what’s presented)…

Air Canada fights regulators over delayed bag compensation

This situation started all the way back in 2022, when a couple living in Toronto traveled to Vancouver with Air Canada. When they arrived at the destination, they learned that their checked bag didn’t make it on the flight, and would be delayed.

The passengers claim they were told by an Air Canada employee that the airline couldn’t located their bag, and that they could spend a “reasonable amount” on necessities. According to the passenger, “they couldn’t even track the luggage, if it’s in Toronto or, like, on the way,” and “I was under the impression, luggage is gone.”

For what it’s worth, their bag ended up arriving at their Vancouver hotel less than 24 hours after their initial arrival. This is where it gets interesting. Upon completion of their trip, the couple submitted receipts to the airline, requesting $3,435 for items purchased.

However, when they submitted those receipts, Air Canada countered by offering them $250 to settle the case. They weren’t happy with this, so they rejected the offer, and enlisted the help of the Canadian Transportation Agency (CTA).

Air Canada’s rules at the time stated that the airline would pay a maximum of approximately $2,400 for delayed or lost luggage. After a drawn out process, the CTA mostly sided with the passengers. While they had initially requested $3,435, the agency requested that Air Canada pay the couple $2,079.

That wasn’t the end of the case, though. In December 2024, Air Canada served the couple with court documents, in an attempt to overturn the ruling. The airline argued that the CTA “did not properly, reasonably or at all, apply and/or interpret” relevant regulations when making a decision.

The airline argued that the couple didn’t provide evidence to justify the amount they spent. They airline also put the couple on blast for what they purchased. The couple reportedly spent:

• $1,121.86 for two pairs of pants, three shirts, and a single dress that cost $348.84
• $570.12 for toiletries, skincare, and makeup
• $525.50 for underwear, jeans, and two t-shirts
• $433.61 for women’s sneakers
• $247.52 for four sets of lingerie and sleepwear
• $1,310 for a monogrammed Tumi suitcase

Just to be clear, the CTA didn’t actually side with the couple on the purchase of the suitcase, so when it came to Air Canada’s lawsuit, that’s not even something that was being questioned.

Air Canada also pointed out that the couple requested reimbursement for items purchased even after their luggage had been delivered to the hotel, but the couple argued that they left the hotel and weren’t aware the bags had arrived. The couple also pointed out that the suitcase was purchased to transport home the replacement items.

“Reasonable amounts” for delayed bags is a tricky topic

I think most people would logically conclude that this couple was probably pushing their luck with the purchases that they made. Now, maybe they really did believe that their bag was lost forever, and they were buying long term replacement items. However, in this context, I think that might have been wishful thinking, and a bit premature.

I will say, though, that the concept of reimbursing passengers for necessities in the case of delayed or lost luggage is a challenging topic, and it sure is open ended. Over time, we’ve seen airlines take vastly different approaches when it comes to what they’ll reimburse.

For example, virtually all airlines would agree that basic toiletries, underwear, and socks, are reasonable. But what about beyond that? If you’re traveling for a business meeting or a special event and you ordinarily wear nice clothes, then is it reasonable to buy an outfit that isn’t cheap, so that you look presentable, by your own standards?

For that matter, if an airline tells you that they have no clue when they’ll be able to find your bag, what’s a reasonable quantity of stuff to buy? Are you just supposed to buy one pair of everything, and possibly go shopping every day or two for more, if it takes time for your bag to be returned?

I’m not sure there’s a right or wrong answer, as we constantly see consumer frustration in this area. It is interesting to see how Air Canada is trying to fight this ruling in court, clearly to avoid a precedent being set about what kind of compensation is reasonable.

Bottom line

There’s an interesting, drawn out situation, involving compensation over delayed luggage on Air Canada. A Canadian couple flew Air Canada across the country, and tried to claim thousands of dollars in compensation for necessities. The airline countered by offering just $250.

The couple reached out to regulators, who mostly sided with the travelers. However, Air Canada is now suing to dispute the ruling.

What do you make of this Air Canada delayed bag situation?