AC must pay for lost bags

[Kip Powick]

Federal regulators have ordered Air Canada to compensate international passengers whose luggage has been lost up to a maximum of about $1,600, regardless of what they were carrying in their suitcases.

The Canadian Transportation Agency said yesterday that, under international law, the country's largest airline is liable up to maximum of $1,000 in so-called special drawing rights per passenger, which is valued based on a basket of currencies and is the equivalent of $1,647 based on Tuesday's exchange rates.

"If they accept it for transport, they're liable for it if you lose it," said Jadrino Huot, a spokesperson for the CTA.

The ruling follows a recent complaint by an Air Canada passenger who had her luggage lost, but found the airline unwilling to take responsibility for the bag's contents.

Kelly McCabe, an Air Canada passenger, lost her luggage while flying in May 2006 from Thunder Bay to New York City via Toronto for a mining industry conference.

Her luggage "contained two mining drill cores, and other items," that her employer, a mining exploration company, estimated to be worth $40,000 based on the cost of obtaining them. She also sought to claim an additional $10,000 relating to the costs of attending the conference without the necessary materials, according to the CTA's decision.

Air Canada, however, said it wasn't liable for the contents of McCabe's luggage because they technically belonged to her employer, not her. As well, it said that the terms of its tariff stipulate that the airline won't be held liable for items that aren't personal in nature.

The CTA disagreed, arguing that international rules require carriers to compensate passengers up to an amount equalling about $1,600, regardless of the contents of the luggage that was lost.

"The agency finds that the baggage at issue qualifies as personal property because the baggage that was checked by Ms. McCabe and for which she received a baggage tag, was necessary or appropriate for her use for the purpose of the trip, namely, to participate in the Conference and undertake business activities," the CTA's decision said.

An Air Canada spokesperson said the airline was "reviewing" the decision.

While the ruling doesn't apply to domestic flights, which are not covered under international conventions, the CTA noted in a statement that it would take the "precedent-setting" decision into account when ruling on other complaints.