By Michael Janigan, Executive Director and General Counsel, PIAC
A few weeks ago, Transport Canada and hundreds of airline passengers across Canada dodged another bullet with the cessation of regular domestic flights by Canjet Airlines. Unlike Jetsgo, which slunk off into financial oblivion without notice, leaving ticketed passengers in the lurch, Canjet arranged for an orderly departure from their service operations. But Canjet didn’t have to be careful in closing down its operations. Like Jetsgo, it could have abandoned passengers to the vagaries of credit card charge backs and travel protection fund schemes in place in only three provinces. For consumers and the travel agencies that serve consumers, that is not right.
The chief obstacle to fixing this problem is the uniform approach of Transport Canada to the regulation of airlines that supposes that the marketplace can police all industry issues such as financial viability of airlines and compensation for jilted passengers. It is unfortunately an approach that ignores the realities of the passenger airline market.
Customers can’t be expected to do a financial analysis of airline operations to determine solvency before purchasing a ticket. Airline financiers should not be able to skip out the door, potentially leaving the industry stakeholders with fewest resources, namely passengers and travel agents who contribute to provincial compensation funds to foot the bill.
Government indifference to consumer issues will not produce a flourishing competitive domestic market for airline travel. The current amendments to the Canadian Transportation Act, Bill C-11, now before the House of Commons Standing Committee do make a tentative first step towards consumer protection. These amendments allow the Minister to make regulations to deal with air carriers that advertise flights at one price, then charge a much higher price in the actual ticket sale after all the mandatory charges and fees are added in. But more is needed to provide a minimum package of passenger safeguards.
By all means, consumers should have the right to fly on their airline of choice. But unless they have the information about airline financial and operational performance, how can they be expected to make a choice? The U.S. Federal Aviation Administration (FAA) at least requires collection and publication of data on customer problems such as airline flight delays, mishandled baggage and oversold flights, the kind of information that is useful in choosing an airline. The abolition of the office the Airlines Consumer Complaints Commissioner, as contemplated by Bill C-11, will also hardly improve passenger welfare, without the implementation of a more proactive response, currently missing from the legislation.
Bill C-11, currently before the House of Commons Standing Committee on Transportation and Communications, represents a unique opportunity to address the gaps in Transport Canada’s oversight, by giving the Minister the power and responsibility to monitor airline financial and operational performance. Through amendments to Bill C-11, it is possible to adopt measures that would bolster consumer confidence and promote competition by ensuring a stable market with transparent and measurable standards applicable across the Board.
A coalition of travel industry and consumer groups, styled the Travel Protection Initiative (TPI), has been working for the last two years to modernize the Transport Canada’s rather blasé supervision of the passenger interest in airline regulation. The TPI package of reforms responds directly to the existing industry problems identified above. The TPI-urged response is hardly revolutionary, but its adoption would earn parliamentarians the continuing gratitude of passengers and travel professionals across Canada.