Transport Committee on Oct. 5th, 2006

[Michael Pepper]

That process or procedure is in place for chartered flights, but many of the flights now are filed as scheduled. There are very few chartered flights that are filed. Even if you look at Europe and Florida and domestic, they're all filed as scheduled. There's very little protection for consumer money. So the charter flights are mainly for all-inclusive package tours where tour operators collect money. They put a package together and they forward the money to the air carrier, and it's to make sure that the consumer receives the money that there is a financial guarantee in place to cover those advanced payments.

There's no such thing in place for scheduled carriers. What I try to illustrate in my very brief summary is that Canada 3000 and Jetsgo were also charter airlines, but they did a lot of scheduled flights, and they were able to generate a lot of cash by having seat sales, which paid for their current expenses. The consumer moneys that were intended for the travel at a later date were not used for that purpose.

[Christiane Théberge]

If I may add something, most importantly now with the website, consumers can book those flights directly, which they were not able to do when this regulation was passed.

[David McGuinty, Liberal, Ottawa South, ON]

Under the FAA, the United States has the service performance criteria that you've outlined. We don't have them or they are not collected and published on a regular basis. Do you see these service performance criteria possibly informing the reporting of an independent complaints commissioner?

[Michael Janigan, Executive Director and General Counsel for Public Interest Advocacy Centre, Travellers' Protection Initiative]

It may well be something to which either an independent complaints commissioner or the agency itself performing the complaints role may have access and with which they may be better able to address problems in the industry.

We also see it as having a hugely positive impact on competition as a whole by giving passengers the ability to access these kinds of reports. If you look on the FAA site right now, you'll find there's a monthly consumer report of things like on-time arrivals, lost baggage, oversold flights. All these kinds of things that you'd want to find out about an airline are listed, and in fact the site provides an opportunity to list why these on-time arrivals didn't take place. We think that will spur better performance by the airlines and incent the competitive market, and may possibly, of course, be useful for the agency itself in identifying trends and heading off problems that may exist in the market.

[David McGuinty, Liberal, Ottawa South, ON]

Is there a gap between, then, the new provincial criteria in Ontario, for example, the new disclosure requirements, the new travel agency standards in Ontario?

[Michael Pepper]

Yes, there's a gap, and it does have a detrimental effect on the travel agencies themselves, because travel agencies do have to disclose the full price, even of the airlines' flights to the consumer, with the exception of the GST and the PST. For instance, when an airline advertises a price in the newspaper, I think what Mr. Gaspar had said was before you click the button, you do see the full price, but it's not disclosed in the advertisement. All of the add-ons are not there.

Ontario requires all of those additional costs to be displayed either separately or in the full price. Likewise, Quebec has the same standard. That was introduced in provincial legislation in Ontario in July of 2005.

[The Chair, Conservative, Merv Tweed]

Mr. Carrier.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

My question if for Ms. Théberge.

On page 6 of your presentation, you recommend that it be required in the legislation that fares advertised by airlines should represent the total cost of services provided by the carrier. In theory, in this bill, the same recommendation may be applied, but in fact, it would be on the recommendation of the minister.

Would you prefer to see that mentioned in the bill because otherwise we would be too dependent on the minister's recommendation, a recommendation which could change, thereby removing any specific guidelines within the bill? Was that indeed what you were trying to say?

[Christiane Théberge]

Yes. In fact, we are quite well aware of the nature of this bill, which suits us rather well. However we strongly recommend that these provisions really be enshrined in the legislation, that it be made in to law and not left to the minister's discretion.

You know as well as I do that ministers come and go. There is a change. I believe this is the third bill that we have come to make recommendations on with respect to advertising transparency. We would like this to be the last time we express our views on the matter. For that to happen it would indeed have to be enshrined in legislation.

[Marie-Hélène Beaulieu, Option consommateurs]

If you allow me, Mr. Carrier, advertising is my hobbyhorse in a way. Because I work for Option consommateurs, I am on the front line, I receive calls from consumers. Everyone's frustrations end up on my desk.

Our organization has got involved on three occasions since 2003. We have held press conferences or issued press releases to denounce the fact that air carriers were not disclosing the total cost of services. It would be highly unrealistic to believe that you can fly from Toronto to Montreal for $73. Earlier on, I heard Mr. Gaspar's comments, and I could not believe that he would go so far as to say that either way consumers know what they will be paying in the end.

Some people have saved all year to treat themselves to a small trip. To find that, once the transaction is completed, the cost is not $73, as in the case of the Montreal to Toronto flight, but rather $111.64, people end up accepting this cost and attempting to swallow their frustrations. That will amount to a 52% gap between the advertised price and the actual price. Moreover, the price is only for one way. It is kind of like going to buy a pair of shoes and having the salesman quote you the cost of one shoe.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I understand.

I would like to ask you another question. Early on, you referred to the air travail complaints commissioner, whose work you seem appreciate, as opposed to that done by the Canadian Transportation Agency.

Does this mean that you would have less faith in the Agency's operation, assuming that the terms we just discussed would appear in the legislation. Would it be correct to say that you do not trust the Canadian Transportation Agency to settle these problems and address complaints, and that you would rather continue to deal with the air travel complaints commissioner?

[Marie-Hélène Beaulieu]

Based on my experience, people are unaware of the process they need to follow to lodge a complaint. I think consumers need to be informed of all of the steps they need to take to file a complaint. I think that with respect to the commissioner, at least when she was in office, you could put a face to a name. That being said, we do have confidence in the Canadian Transportation Agency, but a great deal of advertising needs to be done on the complaint process.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Are you concerned by the lack of awareness people have of the Canadian Transportation Agency's work? You are telling us that you can put a face to the Air Travel Complaints Commissioner's name because she is known, but given the broad powers which will be granted to the Agency, I think people will also be able to put a face to that name.

Have you heard anything with respect to the operations of the Canadian Transportation Agency, or is it a total unknown?

[Christiane Théberge]

We have heard certain things. For instance, the Association of Canadian Travel Agencies receives calls from consumers asking with whom they may file a complaint. We refer them to the Canadian Transportation Agency, in the same way that we used to refer them to the Air Travel Complaints Commissioner.

Based on what we hear from these people who are filing complaints, I think people are well served and satisfied by the Agency's work for the time being. We have no reason to believe that the Agency's staff is not doing its work correctly. On the contrary, I think that if we look at what they have done, it has been perfectly fine. I think it will be even better once they are given broader powers.

We are mostly concerned about visibility, because consumers do not know where to turn. So, the Canadian Transportation Agency needs to carry out a small advertising campaign to let consumers know that they can deal with the Agency if they have a problem with an airline.

[The Chair, Conservative, Merv Tweed]

Mr. Comartin.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Thank you, Mr. Chair.

I have some questions on all-in pricing versus the add-ons.

I have a two-part question for all of you. Do you have any information about the opinion or sampling of the public as to what it would prefer about the all-in pricing? Would they prefer to have it all there so they don't have to worry about getting add-ons, or would they prefer being told in advance that this is the base price and then there are these add-ons? Has there been any sampling? Then, for your own agencies, what is your position with regard to the two alternatives?

[Marie-Hélène Beaulieu]

In March 2005, Option consommateurs commissioned research by Environics Research Group, and the figures were surprising. This study revealed that 93 per cent of Canadians would like airlines to advertise the total costs of services. In fact, in December 2003...

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

When was that?

[Marie-Hélène Beaulieu]

It was on March 23, 2005 and this research was done by Environics Research Group. In December 2003...

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

What was that percentage?

[Marie-Hélène Beaulieu]

Ninety-three per cent.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

In terms of your own positions, your agency's positions, which of the alternatives?

[Michael Pepper]

We wholeheartedly advocate for full price disclosure in advertising at the federal level, because we're subject to it in Ontario, and there's no level playing field. It puts the travel agencies at a disadvantage when they have to advertise the same fares at the full price. When they're advertising airline fares, they have to disclose all the costs.

[Christiane Théberge]

It's the same thing in Quebec. The two biggest markets for travel are Quebec and Ontario.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

What's your experience been in terms of the impact on the agents who have to show the all-in price?