Transport Committee on Nov. 18th, 2009

[Marco Prud'homme]

Mr. Roy—

[The Vice-Chair (Hon. Joseph Volpe), Liberal, Joe Volpe]

You only have two minutes left for both of you. Mr. Roy obviously wanted to express his point of view and he has done so. I would ask you to please make a very brief comment.

[Marco Prud'homme]

Indeed, if people are complaining to the media, it is no surprise that the service is not improving. So the people should probably turn to the right persons. I have worked for a carrier and I know that the Magdalen Islands are one of the most difficult places to access in all of Quebec. That aspect must be underlined. Thank you very much.

[The Vice-Chair (Hon. Joseph Volpe), Liberal, Joe Volpe]

Do you have a comment, Mr. French? Otherwise, we can stop there, no problem.

[Woodrow French]

I think I'm pretty well commented out, Mr. Volpe.

Thank you very much.

[The Vice-Chair (Hon. Joseph Volpe), Liberal, Joe Volpe]

Thank you.

I'm going to exercise my opportunity here as chair just to make a very brief comment.

Maybe you can respond, Monsieur Prud'homme, to a couple of things that I found worthy of note.

One, you mentioned that we can't get specific information regarding the operations of any airline because the operations and the routes are a little too complex. I'm wondering whether it's such a complex business that nobody understands how it goes. That's the first thing that crossed my mind.

Secondly, our researchers here have done something that all of our colleagues on both sides of the table have--namely, the Canadian Transportation Agency, while it administers airlines' domestic tariffs, doesn't really have a hammer to enforce any of the actions that might be solicited as a result of complaints.

I know you probably have a different view there, but maybe we'll raise that with some of your colleagues who come up next.

Those are just two reflections. I realize we're at the end of the time. I hope that's not too unfair, but I'd thought you'd want to see how somebody might react.

[Marco Prud'homme]

I should remind you that in North America, each and every minute of every day, some 5,000 or 6,000 trips are taking place in the air transport network as a whole. In each case, passengers must either board a connecting flight because the initial aircraft is going somewhere else, or board a flight from another airline altogether. So to try and determine the profit made on one section of a route is practically impossible. There are only estimates.

As for your second question, please forgive me, I've just forgotten it.

[The Vice-Chair (Hon. Joseph Volpe), Liberal, Joe Volpe]

The question will be put to others. Thank you for being here.

[Marco Prud'homme]

Thank you very much.

[The Vice-Chair (Hon. Joseph Volpe), Liberal, Joe Volpe]

We're going to take a one-minute break--while you, gentlemen, you'll go and become the lobbyists--and then we'll bring all the others back before us.

[The Vice-Chair (Hon. Joseph Volpe), Liberal, Joe Volpe]

I'm going to call the meeting to order. I said we would be a minute.

I want to welcome the representatives from the Air Transport Association of Canada. Mr. John McKenna is president and chief executive officer. He's accompanied by Madam Tracy Medve, who's a director on the board of directors.

As well, we will hear from the Consumers' Association of Canada, represented by Mr. Mel Fruitman.

Lady and gentlemen, thank you for joining us. You'll have, as you've seen, about ten minutes apiece. We're going to be called away at 5:30. We're going to end the committee meeting at that time. We were going to do some committee business, which we will put off until Monday so that we can give our witnesses an opportunity to get their messages across.

By the way, although there are two of you, it's still only ten minutes. You may wish to hand off the baton, so to speak; it doesn't matter.

Mr. McKenna, Ms. Medve--who's first?

Go ahead, Mr. McKenna.

[John McKenna, President and Chief Executive Officer, Air Transport Association of Canada]

I will make a statement, and Tracy, Mrs. Medve, will answer questions, or we'll share answers.

[The Vice-Chair (Hon. Joseph Volpe), Liberal, Joe Volpe]

As you like. Members have a tendency to be independent-minded about to whom they will ask questions.

[John McKenna]

That's fine.

Good afternoon. My name is John McKenna and I'm the president of the Air Transport Association of Canada.

I'm accompanied today by members of our board of directors: Tracy Medve, president of Canadian North Airlines, and Mark Williams, president of Sunwing Airlines. Michael Skrobica, vice-president of industry monetary affairs at ATAC, is also here.

The Air Transport Association of Canada has represented Canada's commercial air transport industry for 75 years. We have approximately 185 members engaged in commercial aviation operating in every province in Canada and providing service to the vast majority of the more than 700 airports in the country.

Bill C-310, in the view of our members, could jeopardize safety, is highly punitive, and could cause unintended adverse consequences both for the industry and for consumers. We would like to focus on four specific elements of this bill that merit serious review. These concern threats to safety; unreasonable financial compensation to consumers; inapplicability in small, remote, or northern regions; and airlines becoming financially responsible for issues beyond their control.

Safety of passengers should be paramount. Accordingly, the Aeronautics Act and the Canada Transportation Act should be respected prior to any consumer rights legislation.

Currently, Canada enjoys one of the safest air transportation systems in the world. The cornerstone of the system is the Aeronautics Act. A key principle of the bill is that the pilot in command decides whether a flight is safe to complete. Bill C-310, under threat of monetary penalty, negatively influences the decision of the captain to undertake a flight.

The bill contemplates exempting airlines from penalties only if an airport has been closed. Airports almost never close and the airports are not currently permitted by regulations to determine whether a flight should depart or land. We believe this bill makes it appear that the authority to make such a decision would be taken away from the captain.

A pilot will also consider the type of aircraft, its load, range of flight, weather conditions en route, its destination, and other considerations. With the decision of whether to depart left in the hands of a third party and penalties on a Boeing 737-200 as high as $120,000, there is a likelihood that pilots would be enticed into risk taking. We're convinced that this is not the intent of the proposed legislation.

Another safety issue is tarmac delays. These delays occur in weather conditions, like snow and freezing rain, that necessitate de-icing of the aircraft. Because airports have installed glycol recovery pads for environmental reasons and there are only a limited number of spots, there is occasional congestion in the lineup to use these pads.

Given that the penalty for an hour's delay on a Boeing 737 could add up to $50,000, there's a clear inducement in a marginal weather situation for a pilot to avoid the lineup. The lesson of the 1989 Dryden accident is that the de-icing must take place.

ATAC recommends that all penalties in Bill C-310 relating to events beyond the airlines' direct control, and all elements that could have potential safety ramifications, be eliminated and that the no-go determination continue to be left in the pilot's hands.

The compensation set out in Bill C-310 bears no relationship to the economic realities of air transport in Canada. Where is the equity in paying $1,200 in compensation to a customer who purchased a $99 ticket to Florida?

The tarmac delays of $500 an hour referred to previously will have every passenger on board eagerly checking his watch. If this indeed is going to compensate the passenger, it should not equal winning a lotto.

Canada has an open marketplace with competition on most routes. If a particular carrier routinely delays or cancels flights, there are generally alternatives available to customers. I would point out that there are no strictures on other transport modes that may experience delays or cancellations, so why air transport?

Let passengers vote with their wallets. Nothing sends out a stronger message than consumers opting for competitors or other modes of transportation when they're not satisfied. ATAC recommends a review of these fines so that, combined, they never exceed the price of the ticket.

Bill C-310 was written envisaging the infrastructure that exists in large airports. Unfortunately, in Canada, circumstances in remote, small, and northern airports are more austere, and communications may be unreliable at best. Some small airports don't even have a terminal building. If an airline flying to and from such a location takes a look at the financial risk that Bill C-310 engenders against a smaller return to flying the route, it is possible that the air carrier will not service these locations, or, alternatively, will provide service on a reduced basis. Was that the intent behind the legislation?

The member for Western Arctic and many of your colleagues from coastal regions could see service to their constituencies severely affected by reduced service during unstable weather seasons. Airlines could simply decide to suspend service to those regions during part of the year rather than run the risk of being penalized on a regular basis because of unstable weather conditions.

ATAC recommends that remote, northern, and smaller communities be excluded from the bill, and that it is not applied to operations that use aircraft with fewer than 60 seats. Most of the aircraft service in small, remote, and northern regions fly within this category. These are all the Beech 1900s; the Dash 8s' 100, 200, and 300 series; the Metroliners; the ATR 42s; and the Convair CV-580s , just to name a few of the planes serving our regions. Also, many jets operate in the north in combi configuration with less than full passenger complement. This could result in a 737-200 operating with as few as 20 seats.

Many of the provisions in Bill C-310 hold the airline accountable for events beyond the direct control of the airlines. Airlines would be liable for weather, ground delays as a result of de-icing paths, congestion, gate availability, and slow snow clearance. Tarmac delays may result from lightning threats that necessitate ground handlers moving indoors. Air traffic control may impose further delays. Is it right to make the airline financially responsible for such issues? The answer is a resounding no.

ATAC recommends that the wording of this bill make a clear distinction of responsibility. Airlines cannot be accountable for delays beyond their control. To make a profit, airlines have to fly their planes as much as possible. Any delays result in a cascade of other delays, inconveniences, and other cancellations, all of which affect passengers flying later that day or even subsequent days using the same aircraft. This leads to lost revenues.

Unfortunately, we have to live with occasional mechanical failures that result in flight delays and, on occasion, the cancellation of flights. A simple instrument warning can lead to a delay to pushback and takeoff while pilots and maintenance crew complete complex checking procedures to ensure the flight can be carried out safely. Airlines certainly do not hesitate to put safety ahead of a good departure record. Certainly it is not the bill's intention to change our commitment to safety.

The Tourism Industry Association of Canada and the Canadian Chamber of Commerce have both come out against this bill, saying it could only result in higher costs to consumers and businesses alike. The air transport industry in Canada is already struggling to be competitive and sustainable, in that it is already considerably burdened with high structural costs, security infrastructure costs, and taxes of all sorts, including the fuel excise tax. The threat of added costs--namely, unreasonable punitive damages out of all proportion to the magnitude of the carrier's revenue on any given flight--could only result in the deterioration of our viable air transportation system for Canadians.

In conclusion, we want to make it perfectly clear that ATAC is opposed to Bill C-310 as it reads today. We feel that should this legislation proceed without substantive amendments, there would be unintended consequences that could lessen safety and ultimately result in reduced service for the travelling public and consumers at large. However, should legislators decide to move forward with this bill, we've prepared a series of suggested amendments, which we have already sent to each member of the committee. We hope that you will seriously consider these amendments, because the safety, quality, and availability of air transport in Canada are at stake.

In closing, I want to reiterate that the Air Transport Association of Canada is opposed to this bill because in its present form, it gives the priority to compensating passengers rather than ensuring the safe operation of an airline. That is unacceptable for the air transport industry.

We thank you for your time and attention. We would be pleased to answer your questions.

[The Vice-Chair (Hon. Joseph Volpe), Liberal, Joe Volpe]

Thank you very much, Mr. McKenna.

Let me go to Mr. Fruitman, please.

[Mel Fruitman, Vice-President, Consumers' Association of Canada]

Thank you for the opportunity to present our views on Bill C-310. We received the invitation to attend less than 24 hours ago, so my remarks will be brief.

The Consumers' Association of Canada is a 62-year-old, independent, not-for-profit, volunteer-based organization with a national office in Ottawa and provincial and territorial representatives.

I'm not a high-paid consultant, by the way. I'm an unpaid volunteer.

[A voice]

You're hired.

[Mel Fruitman]

Our mandate is to inform and educate consumers on marketplace issues, to advocate for consumers with government and industry, and to work with government and industry to solve marketplace problems in beneficial ways.

For the past 25 years, the performance of successive Canadian governments with respect to consumer protection has been less than stellar. I would even go so far as to say it has been all but non-existent. We now have before us an opportunity to give at least that portion of the Canadian public who travel by air the service and protection they deserve. While we have seen increased competition in recent years, since the demise of its major competitor, Canadian Airlines, Air Canada and other carriers, to a lesser extent, seem to treat their customers with disdain.

Some examples are misleading advertising, finding out that only one seat is available at the advertised price when trying to book for a family of four, inappropriate add-ons to ticket prices, charges for checking bags, and, most recently, extra charges for seats that have a little extra leg room because of where they are situated within the aircraft. Those tend to pale by comparison with those situations that Bill C-310 attempts to modify or correct.

Before I go any further, let me note that safety is always paramount. We do not feel that safety should be, nor will it necessarily be, compromised by the types of measures introduced in this bill.

This bill deals with a number of the most egregious insults foisted upon the flying traveller: cancellations, delays, sitting on the tarmac, denial of boarding, overbooking, and lost baggage. Even though the CAC is not set up to receive complaints, nonetheless we do receive thousands of them each year relating to these specific problems. I will not take time now to describe the situations, since they are well known to committee members and have been mentioned by Mr. French.

In fact, I guess we know they are very real when they find their way into a cartoon in this morning's Globe and Mail. “Bizarro” shows a patient lying on a psychiatrist's couch saying, “I'm not afraid of flying per se, I'm afraid of long lines, hidden fees, irrational security requirements and unexplained delays.”

I will note, however, comments made before this committee by a frequent flyer who calculated that his own incidences were less than one-quarter percent of his flights. I would suggest that those of us who fly a lot have become so inured to these occurrences that we hardly notice them unless they actually cause us to miss a meeting or a grandchild's birthday celebration.

But what about the vacationers who lose several days or miss out completely because of cancellations or overbookings? What about the parents trying to amuse two toddlers while waiting for their delayed flight to depart; the elderly lady who becomes ill while incarcerated for hours sitting on the tarmac with inadequate air or water or other facilities; the wedding party left without their attire because of lost luggage? It does not matter to them that this happens less than one-quarter percent of the time.

Contrary to statements made before this committee, Bill C-310 is about rights for passengers and it does aspire to improve the travelling experience of Canadians. From a consumer's perspective, all of the provisions contained in the bill would reduce incidences of passenger inconvenience if airlines reacted appropriately. The aspiration of the bill is not to penalize airlines but to act as a deterrent, to encourage the airlines to do right by their customers and to try harder and thus to avoid penalties. Please do not be swayed by blackmail, the threats to reduce service to rural communities across Canada. This bill does not have to “profoundly affect the cost structure” of the business or “force dramatic price increases on Canadian consumers”, not if the airlines view it as an incentive to have satisfied, happy customers.

The requirements that would improve customer convenience and satisfaction and compensate them for egregious abuses are not onerous. The bill does not, as stated, “make airlines responsible for the weather”. If the current wording is less than satisfactory, particularly with respect to delays, it can easily be rectified.

Frankly, I am astounded at the response to the phrasing in there regarding extraordinary circumstances. This is the kind of escape hatch that lawyers generally love to have in legislation. I do not understand why it's being objected to right now. It covers a gamut of everything and really gives them a huge out.

There is nothing in this bill that requires airlines to subjugate public safety to passenger convenience. The whole gloom-and-doom scenario is written by those who do not treat their customers with respect, do not aspire to improve the passenger experience, will not accept responsibility for their own shortcomings, do not wish to alleviate the pain felt by passengers in these situations, and, as a result, can only see penalties and not opportunities.

We urge the committee to please endorse Bill C-310 and give Canadian air travellers the protection and comfort they pay for and expect to receive.

[The Vice-Chair (Hon. Joseph Volpe), Liberal, Joe Volpe]

Well, Mr. Fruitman, I guess you've done committee members a little bit of a favour. They're going to be able to ask more questions as a result of your brief presentation.

I'll go to Mr. Byrne.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you, Mr. Chair.

Thank you to all the witnesses appearing before us under oath.

Mr. McKenna, your organization represents a substantial portion of the commercial airline business in Canada. Is that correct?

[John McKenna]

We represent a large number of airlines--small, regional, local, and national airlines.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Which of your airlines—all, most, many, some, or none of the airlines you represent—are signatories, formal signatories, to “Flight Rights Canada”?

[John McKenna]

Our association is a signatory to “Flight Rights Canada”, and we are mandated by our members to be.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Every one of your members adheres to “Flight Rights Canada”.

[John McKenna]

I could ask, but I could not tell you now if everyone does.

As an association, it was voted by....