Transport Committee on Nov. 2nd, 2009

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Sure.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Thank you.

As a person who has owned a business, been in business for a number of years, and used air service regularly, I’m a person who knows that there “ain’t no free lunch”. If there is a cost, someone has to pay it.

You talked about subrogation—I'm sorry, I'm not familiar with the word, and I'll have to get my dictionary out—but fundamentally you're saying that the insurance companies will find somebody else to pay. As a business person, I know that if the costs increase to the airlines, then I, as a consumer, am going to see significant increases in costs for my travel, because somebody has to pay the bill.

Effectively you're saying that all of us are going to have to share that responsibility. Air Canada is a publicly traded company. On the stock market, it means that my stock is going to be worth less if I own shares in Air Canada or WestJet. My shares are likely to go down....

How is this going to help business in the long run?

[The Chair, Conservative, Merv Tweed]

I have to ask that the answer be very brief.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

I only hope you were as concerned when the airline was paying its chief executive officer $27 million. As a matter of fact, I think $27 million is low; I believe he was getting $41 million.

You can pay a lot of compensation with $27 million or $41 million.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Well, I'm concerned that the consumer is going to bear the brunt

[The Chair, Conservative, Merv Tweed]

I will thank our witness for being here.

We're going to take a two-minute break and bring forward our next group of witnesses.

Thank you, Mr. Maloway.

[The Chair, Conservative, Merv Tweed]

Welcome back to part two.

Joining us at the table now, from the National Airlines Council of Canada, are George Petsikas, president, and Brigitte Hébert, director.

Welcome. You've obviously heard some of the discussion.

Before I open, I have a point of order by Mr. Volpe.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Some people took some offence to the question I asked Mr. Maloway earlier on about procedures in committee.

[An hon. member]

Being held under oath.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

But I think that's something that applies to all witnesses.

Rather than offend anybody who's coming before us, I just wondered whether you, Mr. Chairman, took my question in the appropriate procedural fashion in which it was intended.

[An hon. member]

All witnesses are under oath.

[The Chair, Conservative, Merv Tweed]

All witnesses are expected to tell the truth when they come.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Thank you.

[The Chair, Conservative, Merv Tweed]

Thank you.

Please begin. Welcome.

[George Petsikas, President, National Airlines Council of Canada]

Thank you very much, Mr. Chairman and honourable members. We're very pleased to be here today to have a chance to comment on Bill C-310.

It was my intention to allow my colleague Brigitte Hébert, director of operations of the NACC, to open with a 10-minute statement. She'll do that, but with your indulgence, I'd like to take the opportunity to add some facts to the debate that has begun here on a specific issue by the previous witness, and that would be concerning Air Canada flight 32 from Beijing to Toronto. Let me take just a few minutes to clear up what happened in that particular case. Then we'll move on to our comments and, of course, I'll be happy to take your questions.

Air Canada flight 32 was inbound to Toronto to land. Nav Canada, because of inclement weather conditions, shut down a runway on which it was supposed to land. It could not land on the other existing runways at Pearson, and as such circled in an attempt to at least wait for conditions to improve. They did not.

The captain therefore made the decision, in consideration of the safety of all aboard, of course, to head to his alternate, which was Ottawa, and to land. Ottawa of course accepted the flight.

The problem with Ottawa is that Air Canada doesn't operate 777s, the largest aircraft in their fleet, into and out of Ottawa. As such, they did not have on that night the ground equipment necessary to tow the aircraft in and out of the gate. So the aircraft had to make some special manoeuvres to sidle up to the gate, if you will. That took a little bit of time. They were able to get some air stairs and get the passengers out.

The passengers had to clear customs, as per Canadian law. Customs officials were not expecting that flight at that time of day. They don't usually handle flights that big with that number of people coming off at the same time. They had to scramble to get people to get those people cleared. So there were additional delays as a result of customs clearance procedures.

Once cleared, those passengers were offered coupons for meals and beverages. Air Canada was able to rebook at least 100 of those passengers onto earlier flights departing from Ottawa, on regularly scheduled flights from Ottawa to Toronto, including a group of 40 who were connecting on a flight to Buenos Aires. Air Canada held the flight leaving from Toronto to Buenos Aires in order to ensure that these passengers made their connection. The rest of the passengers were able to fly back on the 777. However, because of flight duty time restrictions, the captain and the co-pilot who brought the aircraft in from Beijing had to basically desist for the rest of the day, because they were past their duty time. In the interest of safety, they could no longer operate. Another crew was brought in. That plane eventually got back to Toronto.

Those are the facts of Air Canada flight 32. I just wanted to put them on the record.

I pass the floor now to my colleague Brigitte.

[Brigitte Hébert, Director, National Airlines Council of Canada]

Thank you, honourable members of the committee, for the opportunity to appear today on private member's Bill C-310, which, as you will hear, contains measures that are deeply troubling not only to air carriers, but also to consumers and Canadian communities.

We are here today on behalf of the National Airlines Council of Canada, which is an industry association comprised of Canada's four largest passenger airlines--Air Canada, WestJet, Air Transat, and Jazz Air LP. Together the member carriers of the NACC directly employ 34,000 Canadians and directly serve 59 Canadian communities. We operate on average 1,800 flights a day, or 657,000 annually. We carry 126,000 passengers a day, roughly the entire population of Kelowna, B.C., or 46 million annually, about 1.36 times the current population of Canada.

This massive undertaking occurs each day, despite the best that Canada's climate can throw at us, and within the regulatory and security frameworks of the Government of Canada and the international jurisdictions we serve. Most importantly, it all takes place safely.

Inevitably, when dealing with that volume of passenger traffic there are going to be instances where passenger inconvenience, either beyond or within the control of the airline, is bound to occur. Airlines work hard to limit such instances, but like any other customer service industry, we are not perfect. Mistakes happen, and when they do, passengers should have rights, and they should have effective recourse if those rights are not respected.

NACC's member airlines understand this and have adopted into our tariffs the provisions of the flight rights program announced last year by Transport Canada. Let it be understood by members of this committee that this is a significant step. It is a formal, legal change to the contract between us, as carriers, and the customers we serve.

If we fail to live up to those conditions, the Canadian Transportation Agency has the power to investigate the circumstances of our failure and determine individually and according to circumstance the appropriate restitution or compensation due.

Furthermore, I would like to restate a commitment we made when Mr. Byrne's original motion on passenger rights was adopted by the House of Commons.

NACC urges parliamentarians, through this committee, to undertake a serious and detailed study of the public policy issues around passenger service in Canada—including an evaluation of airlines, Canada's airports, federal institutions and bodies and the regulatory regimes that affect international destinations served directly from Canada.

We want to find solutions. We want to move our passengers more efficiently. We welcome your interest, and in the context of a sincere effort to help our customers, we welcome your scrutiny.

That brings us to the reason we are here today, a discussion of private member's bill C-310. Unfortunately, Bill C-310 is not going to help passengers in Canada. Bill C-310 is not about rights for passengers and it does not aspire to improving the travel experience or growing the travel options of Canadians.

There is not one single provision contained in Bill C-310 that would in any way serve to actually reduce instances of passenger inconvenience if the legislation were adopted.

Bill C-310's only aspiration is to penalize airlines in numerous instances for situations that are clearly far beyond the control of even the most conscientious carrier.

And let there be no mistake, the penalties proposed in Bill C-310 are very severe. If passed, this bill will hurt airlines operating in Canada, profoundly affect the cost structure of our businesses, force dramatic price increases on Canadian consumers and lead directly to service reductions, not only in Canada's busiest airports, but also in rural communities across Canada—specifically, airport communities in Atlantic Canada, northern Canada and in rural northern Quebec—that are dependant on reliable air service to provide a business and social link to the rest of the country.

Firstly, because Bill C-310 employs Canada's court system as a dispute-resolution mechanism, and because imprecise terms are sprinkled through virtually every major provision of the bill, no one can determine with any certainty at this point how Bill C-310 will actually be applied, and no one will know until a series of protracted and costly legal battles takes place.

Undoubtedly you will hear, or have already heard, that this language is based on European legislation—an assertion which is deeply troubling—when we know that the courts of EU member states are so confused by the wording and intent of the regulations on which Bill C-310 is based, that they have—after numerous protracted legal proceedings—referred questions to the Court of Justice of the European Communities. Essentially, they have thrown up their hands.

Surely these are not problems Canada is seeking to replicate in the creation of our own framework for passenger rights.

As was stated earlier, air carriers are, for whatever reason, the exclusive focus of this bill. Federal agencies or entities, such as Nav Canada, CATSA, CBSA, and Canada's airport authorities are not contemplated, and no consideration is given to any foreign entity or legal framework despite the complex and vital roles those organizations play in every trip Canadian passengers make.

By ignoring these obvious connections, Bill C-310 fails to address in any meaningful way the problems it identifies, instead leaving it to airlines to deal with circumstances beyond their control or face excessive penalties.

But more troubling is that Bill C-310 doesn't provide any allowance in key clauses for the most obvious and frequent culprit in airline disruptions. Bill C-310 makes airlines responsible for the weather.

For instance, in clause 5, in case of delay, airlines must provide a total of two phones calls, e-mails, faxes, or telex for each passenger, as well as meals and hotel accommodation if required. If the airline fails to comply with any of these obligations, it must pay each affected passenger $500. If a flight is delayed more than five hours, the airline must also offer to reimburse all airfares.

Clause 5 offers no exemption—even in the form of loose “extraordinary circumstances” language—from obligations if the delay is caused by a weather event or a safety concern. Clearly, an airline is not doing anything wrong if snowfall in Gander or Trois-Rivières is preventing the on-time departure of an aircraft. But the airline is liable.

There are clearly some serious problems with Bill C-310, but its most egregious flaw is its failure to consider the safety of passengers and crews. In numerous instances Bill C-310 discourages and penalizes airlines for ensuring the safe operation of a plane, imposing substantial financial liability on carriers when flights are cancelled or delayed for safety reasons. It is counterintuitive to the promotion of aviation safety for the Government of Canada to implement a system of penalties to be imposed on airlines precisely because they will not operate in instances when public safety could be jeopardized.

Throughout the entirety of Canada's regulatory framework governing aviation, safety is the top priority. In adopting this legislation, members would in effect undo that principle. Passenger convenience is of greater concern than public safety in the drafting of private member's bill C-310, and that cannot be acceptable.

These are our top-line concerns with Bill C-310, but by no means is my presentation here today comprehensive in terms of the significant problems legislation like Bill C-310 would create for commercial aviation in Canada and the significant expense and inconvenience it would create for the public at large. I could quite literally go on for hours, but I'm sure members have questions.

Before I close, I would like to address the assertion that Bill C-310 can somehow be quickly amended to deal with its deficiencies. That is simply not practical.

The bill's reliance on punitive measures, its adoption of open-ended definitions, and its complete exclusion of all other aspects of the aviation supply chain mean it is fundamentally flawed. Bill C-310 requires complete redrafting of almost every clause contained in the legislation as proposed. Undertaking the work to do so would require a comprehensive review of the entirety of the aviation service and value chain to ensure that committee members can make the necessary amendments without unduly negatively affecting the state of Canadian aviation.

In summary, Bill C-310 does nothing to improve the passenger experience and has the potential for wreaking havoc on industry costs and the viability of air services. It needs to be withdrawn and replaced with a new initiative, which the NAC would wholly support and which would be based on a balanced, reasoned approach that considers the concerns expressed today and the totality of Canada's aviation system.

We hope that this cooperative approach is the path this committee chooses to follow, ultimately to the benefit of all Canadians. Bill C-310, unfortunately, benefits no one.

Thank you for your time.

[The Chair, Conservative, Merv Tweed]

Thank you very much.

Mr. Volpe.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Mr. Chairman, I wonder whether Mr. Petsikas would tell us whether this list he provided to us, which includes at least eight other aviation councils....

Are they part of your association? You provided us with a list of people whom we might want to hear from--for example, Air India, Japan Airlines, Icelandic.

Do you represent them too?

[George Petsikas]

No, no, these are independent associations.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

You just thought it would be good for us to hear them.

[George Petsikas]

Absolutely. These are associations that have expressed independently their concern.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

To you.

[George Petsikas]

Well, to us and on the record as well.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

I'm wondering if some of the questions Mr. Maloway presented are ones you're prepared to answer. For example, how much did any of the Canadian airlines pay in Europe as a result of this bill or its brother or sister bill in Europe from 1991 on for denial of boarding or for inconvenience after 2005? Do you have that information?

[George Petsikas]

I don't have it and I'm not prepared to divulge that on behalf of individual member carriers, Mr. Volpe.