Abstract

The case describes a customer incident in November 2022 related to Air Canada. A customer had purchased a bereavement fare using the instructions given by the chatbot on the airline website. Later when the customer applied for a partial refund, the claim was denied by the airline. Staff argued that the chatbot’s responses were incorrect and non-binding and it was the responsibility of the customer to refer to the official refund policy that was available on another part of the website. The case then describes the details of the dispute that went to the Civil Resolution Tribunal. The tribunal ruled in favor of the customer, holding the airline responsible for the chatbot’s misguidance. The tribunal applied the principle of respondeat superior (vicarious liability) and clarified that the chatbot is not a separate legal entity and as a result Air Canada was accountable for its actions and the inconvenience caused to the customer. The case focuses on the need for organizations to take up responsibility for all the information they provide whether it is human or AI agent. It also highlights the strategic and operational challenges faced by companies deploying AI in customer-facing roles. The case can be used to understand the trade-off between efficiency and accuracy using technological innovation like Gen AI.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Discuss AI integration and related customer experience risks.
• Examine legal and ethical accountability of AI systems.
• Design AI governance and risk mitigation strategies.

Keywords

Artificial Intelligence (AI); Customer Experience; Service Failure; AI Governance; Digital Transformation; The Gaps Model of Service Quality; Consumer Protection,Air Canada; Aviation