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Feds: Report to passenger service
Globe and Mail
Wednesday, March 23, 2005, p A21
Business failure in the Canadian airline industry rarely fails to produce marketplace bathos. In the Jetsgo meltdown, the insolvent airline has pointed fingers at its competitors, Nav Canada and the Competition Bureau, with hostile rejoinders by the blamed. The resulting ruckus about who knew what when has left the principal parties looking like prep-school miscreants arguing about who broke wind in choir. But the fiasco offers important lessons.
The somewhat surprising sight of the Prime Minister and his Minister of Transport shrugging off the consumer casualties of the Jetsgo failure as casualties in the great unfolding of the marketplace is all too consistent with Ottawa’s approach to airline regulation. Whatever the financial calamities sustained by the industry stakeholders or the indignities heaped on airline passengers, the government intends to confine its role to that of a doleful safety inspector and toll collector; the recent federal budget axed the airline complaints commissioner who had the temerity to bring bad news from the front. The idea that carriers might have licence terms mandating consumer protection at least as rigorous as the licence rules for taxis delivering passengers to the airport is, for Transport Canada, absurd.
But the reports of the airline complaints commissioner before the demise of the office were replete with examples of passengers being treated shabbily by carriers that seemed content to forgo possible future customer business for temporary financial advantage. Airline advertising, unencumbered by bothersome provincial consumer-protection rules requiring transparency and disclosure, often looks like a Mad magazine parody of sleazy promotions. Rock-bottom fares lure passengers to book for tickets that then require markups for fees and surcharges that are often many times the price. Despite their shaky financial record, the airlines themselves don’t participate in an industry-compensation scheme similar to that for travel suppliers licensed provincially in British Columbia, Ontario and Quebec.
One central flaw of Ottawa’s current airline policy is its refusal to acknowledge the airline industry’s unwillingness to self-police its own consumer unfriendliness. Another is the difficulty of inducing airlines to compete on the basis of quality of service. Transport Canada’s stolid acceptance of a succession of crises de jour seems to be entrenched either as a result of free-market zealotry or a culture of bureaucratic torpor. Whatever the cause, it harms the quality of air travel in Canada.
Other jurisdictions have been quicker to act when they perceive a decline in how airline customers are treated. In B.C., Ontario and Quebec, provincial rules forbid travel agencies to engage in the same shell games involving final ticket prices currently practised by airlines. This puts travel agents at a disadvantage in attracting customers—who, in turn, are increasingly bereft of those agents’ useful advice. (A tepid federal government attempt to address this issue last year died on the order paper.)
The U.K. Air Transport Users Council is funded by the Civil Aviation Authority to act as a watchdog for passenger interests and to police airline misconduct. The U.S. Federal Aviation Authority takes an advocacy interest in passenger service by widely disseminating airline-on-time and reasons-for-delay statistics. Compare this to Transport Canada’s website, which expresses sympathy this week for Jetsgo passengers and gives telephone numbers of credit card companies for refunds.
Providing enforceable consumer-protection rules for all airlines doesn’t inhibit airline competition, it enhances it. Acting with other jurisdictions to respond to devious airline advertising practices would be a good start. So would reinstating the airline complaints commissioner’s office. An industry-financed mandatory-compensation scheme, similar to provincial models for travel-supplier failure, should be available for all passengers holding worthless airline tickets. Finally, consulting Canadians on what they expect from air travel might be instructive. Jean Lapierre could risk losing Air Canada’s Robert Milton’s accolade as “the best Transport Minister in a long time,” but the benefits might be considerable.
Michael Janigan is executive director and general counsel for the Public Interest Advocacy Centre.