"Advancements may impact as negatively on those passengers as is the case with passengers whose flight is delayed," the Canadian Transportation Agency said in a decision released Thursday.
It said passengers should be eligible to receive a refund or alternative flight if they can't accommodate an airline's decision to push up its departure times.
The agency ruled in favour of passenger rights advocate Gabor Lukacs, who has previously challenged the practices of several airlines. It determined that Air Transat's existing rules were not "reasonable or balanced."
Lukacs welcomed the decision, even if it only helps very few passengers.
"Airlines cannot walk away from liability if they caused delays or if they substantially altered the service they've promised to provide when you buy the ticket," he said in an interview from Halifax.
He said the ruling will provide passengers more protection for commercial decisions airlines make that can be devastating for travellers who cannot alter their work or other commitments to catch earlier flights.
Lukacs said he filed the complaint against Air Transat because it had faced a complaint several years ago. He first challenged Sunwing — another vacation package company — after receiving a complaint by a family affected by a flight change. The Toronto-based company voluntarily changed its rules earlier this summer.
He insisted that the change doesn't create a loophole by which passengers can seek compensation if they can accommodate earlier flights.
"The idea is not to give people free money; the idea is simply to ensure that passengers who are adversely affected by it can tell the airline this is your problem not mine."
Air Transat — a division of tour company Transat A.T. (TSX:TRZ.B) — said pushing up departure times happens very infrequently.
The Montreal-based carrier said it will respect the ruling and make the appropriate change by the Sept. 23 deadline.
Spokeswoman Debbie Cabana said most customers adjust their schedules after being notified of an earlier departure time.
"But certainly, if people can't and complain, we will give a refund and conform with the decision," she said in an interview.
Cabana said the airline didn't contest the principle of compensation but thought a 2004 ruling by the agency supported providing remedies only when flights are advanced by more than six hours or when passengers are not notified at least 48 hours in advance.
Meanwhile, WestJet Airlines (TSX:WJA) said it had no policy on compensation for advanced flights because it only pushes up departures by a few minutes on rare occasions, such as when an airport needs a gate and only does so if all passengers are on board.
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