Air Canada (AC) Scrambles to Address Backlog of 96,000 Traveler Complaints

Air Canada (TSE:AC) has turned to arbitration to address its growing backlog of customer complaints.

Canada’s flagship airline is routinely rated worst in the world when it comes to metrics such as customer service, on-time departures and arrivals, and baggage delivery. As such, the Montreal-based carrier has been saddled with a massive number of customer complaints.

At last count, Air Canada was struggling to resolve a backlog of 96,000 customer complaints. Currently, people who fly on Air Canada are waiting an average of three years to have their complaint against the airline addressed.

The Arbitration Process

Now, Air Canada says it is launching what it calls a “pilot project” to try and speed-up resolution of its swelling customer complaints. The airline is asking 500 randomly selected people who have filed complaints against it if they want their cases referred to an independent arbitrator.

The claims often revolve around demands for refunds or financial compensation after a flight delay or cancellation. Under the arbitration process, an adjudicator would rule on the claims within 90 days. However, decisions by the arbitrator will not be binding, notes Air Canada. It remains to be seen how keen consumers will be to take their chances with an arbitrator.

AC stock has declined 33% over the past five years.

Is AC Stock a Buy?

Air Canada’s stock has a consensus Moderate Buy rating among 12 analysts. That rating is based on six Buy and six Hold recommendations issued in the last three months. The average AC price target of C$23.76 implies 28.73% upside from current levels.