The second concern we would like to address is with respect to airfare advertising transparency. We were here earlier on and heard a great deal about the matter. We believe that the proposed amendments in Bill C-11 will only give the minister power to prescribe regulations sometimes in the future. TPI does not believe that the airlines will willingly change their advertising practices. We see every indication that they increasingly tend to break up their airfares and announce one way fares when these are not even available. We have seen cases where consumers, upon completing the transaction, had paid 25%, 50% or even 90% more the amount initially advertised by the airline.
In the past, the airline industry has promised to take voluntary measures, but they never delivered the goods. We are therefore skeptical of arguments put forward by the airlines, in other words that the airline industry can be self-regulating with respect to consumers' interests. Despite years of discussions with the airline industry and a series of false starts, the airline industry has not moved voluntary on this issue.
We believe that the requirement to full disclosure, with details, should be firmly entrenched in the legislation and apply to all airlines which advertise in Canada. After all, air carriers providing services in United States are already subject to these requirements. There is indeed American legislation requiring that air carriers disclose their fares in full. It is stipulated that any advertising or solicitation by an air carrier or by one of its agents or middlemen will be considered an unfair or deceptive practice, unless the price stated is entire price to be paid by the customer to the air carrier, or the agent. In subsequent interpretations of this requirement, the US DOT has issued notices to clarify that the intent of the rule is to ensure that members of the public are given proper fare information on which to base their airline travel purchasing decisions.
It should also be noted that the US DOT just recently refused to change its rule and enforcement policy that have been in place for 21 years. The Department concluded that the current practice protects consumers and helps them compare prices. It also found that the current rule promotes healthy competition while leaving airlines with freedom to innovate.
Because Canadian airlines are not covered by any provincial regulations, they perpetuate a situation where consumers often experience “sticker shock” when they see the final travel bill. As was mentioned earlier by Michael Pepper, several provincial jurisdictions including Quebec and Ontario, already require that travel agents and wholesalers be fully transparent when it comes to their advertising, something which air carriers are not subjected too, I might add. In Ontario, there is the requirement that the advertised price indicates clearly and in an obvious manner to the consumer all additional fees , with the exception of provincial sales taxes and GST. The same applies in Quebec.
It is important to remember, when we refer the healthy competition within this industry that the current situation gives airlines an unfair advantage over , in many cases, largely small businesses, creating an uneven playing field at the expense of travel agents and wholesalers and also consumers.
TPI is therefore of the view that transparency in advertising needs to be entwined in the legislation and not left to the discretion of the Minister of Transport and the agency.
One other issue is with respect to the air travel Complaints Commissioner. TPI members certainly supported the position and role of the airline Complaints Commissioner when it was created. While we believe that the Commissioner was hampered in his/her position by a lack of powers to take substantive action, having a visible place for consumers to voice their concerns and issues, and having the Commissioner annual report, added an element of transparency to the system, that cannot be replaced by the officials at the Canada Transportation Agency. While we have confidence that the CTA can adequately carry out this function, we are concerned that the issues will loose their public focus., through what was referred to earlier as the “embarrassment” that such an annual report could bring about. We do believe that this balance is important to the consumer, in a way, finally giving consumers some power.
For these reasons, we are prepared to take a “wait and see” approach with respect to this new way of dealing with complaints. However, we expect that the CTA will take a proactive role in ensuring that passenger complaints are appropriately addressed, and that this role is well-known to airline passengers,so that they may know where to lodge their complaints.
In closing, we recognize that this bill addresses many important transportation issues. TPI believes that it is in the public interest that these consumers' concerns about air travel have a proper hearing and debate. By adopting our recommendations and amendments to Bill C-11, we believe that it is possible to adopt measures that would booster consumer confidence and promote competition by ensuring a stable market with transparent and measurable standards applicable across the board. We have all seen the statistics with respect to our main air carriers and that the numbers have been rising from month to month. So this is a stable industry, at the moment.
We thank you for your attention.