Good afternoon.
My name is John McKenna. I'm the president of the Air Transport Association of Canada.
ATAC has represented Canada's commercial air transport industry since 1934. We have approximately 190 members engaged in commercial aviation, operating in every region of Canada.
We welcome this opportunity to present our comments on Bill C-49 as it addresses important issues of commercial aviation in Canada. Passenger rights, foreign ownership, joint ventures, CATSA, and the CTA have been subjects of debate for some time.
My comments, however, will address only the major themes of the bill as the applicability of the proposed measures will be determined only by the company regulations to ensue. These regulations, which will be developed by the Canadian Transportation Agency, are probably one year away.
As for foreign ownership of Canadian airlines, the minister claimed, in his November 3, 2016, speech before the Chamber of Commerce of Metropolitan Montreal, that increased foreign ownership “will lead to more options for Canadians, and allow the creation of new, ultra-low cost airlines in Canada”.
The presence of more airlines usually offers greater choice to travellers, but we have yet to hear convincing arguments supporting the claim that foreign investments will pave the way to ultra-low-cost carriers.
Contrary to what the government claims, increasing foreign ownership of airlines will not lead to the creation of ultra-low-cost airlines in Canada.
Lower operating costs to airlines, not the source of capital, are the key to lower costs to the travelling public. Only when the government decides to support, rather than bleed, the air transport industry will ultra-low-cost carriers stand a chance in Canada.
Increased foreign ownership of airlines can also lead to an increase in the export of profits generated in Canada to foreign interests rather than reinvestment in our industry.
This being said, we don't oppose the government's intention to allow foreign ownership of up to 49%. However, we ask that this proposed change be accompanied by reciprocity with our foreign partners. In other words, if we allow foreign investors to own a 49% stake in our airlines, we would expect to have the same privilege in their country.
I would be curious to know if our government has entered into discussions with our major trading partners on reciprocity in terms of increased foreign ownership of airlines.
Passenger rights is a popular theme in Canada, and the government wants to ensure that passengers are protected by law. Some of the measures the minister is keen to address include compensation standards for passengers for delays and denied boarding due to factors within the carrier's control, and lost or damaged baggage. The minister also wants clear standards allowing for children to be seated with parents at no extra charge, and for the transportation of musical instruments.
We appreciate that the government wants to help the travelling public navigate through simpler rules and have easier access to support in unfortunate circumstances where those standards are not being met.
Please bear in mind that over 140 million people travelled by air in Canada in 2016. The number of complaints filed each year at the CTA was well under 500. The reason I raise this is to give a perspective regarding the size of the problem. Of course some complaints remain at the airline level, but even then the vast majority of travellers have a good passenger experience.
We believe three major principles have to be incorporated in the passenger rights legislation.
A key principle of the bill is that the go-no go decision must remain with the pilot. The threat of severe, even unreasonable, financial repercussions should not be allowed to influence the pilot's decision.
Second, the compensation paid out to aggrieved passengers should be in line with the economic realities of travel in Canada. Unreasonable monetary compensation out of proportion to the magnitude of the carriers' revenue on any given flight could only result in a deterioration of our enviable air transport system, perhaps even including reduced service on some routes.
For example, air passenger rights in Europe are generous to the point that a passenger could receive compensation for a delayed flight which by far exceeds the price paid for the ticket.
Such practices can only lead to increased costs to airlines and to all passengers.
Shared responsibility is another major principle. You can't hold an airline accountable for events beyond its control, the minister has stated. Some of the measures we are looking at include compensation standards for passengers denied boarding due to factors within the carrier's control. We need a clear definition of what falls under a carrier's control.
While it may be a carrier's decision to cancel or delay a flight, the reason for doing so may be well beyond the carrier's control. Weather, ground delays as a result of de-icing pad congestion, snow clearance, congestion of the airport of destination, and air traffic control all affect an airline's decision. Also, some delays are safety related.
The safety of passengers is the utmost preoccupation of pilots and airlines. Safety-related delays should not result in penalties for the airlines. How such delays are managed by the airlines is what the law should address.
An additional principle is that a one-size-fits-all policy is so widespread at Transport Canada that Transport Canada's policy just can't apply here. You can't impose southern compensation standards as applied to Canada's largest airports to northern and remote airports.
Ease of compliance with the law, administration of complaints, and user-friendliness for passengers all depend on the complexity of the regulations which will accompany the proposed changes in the law.
We only ask that the government work collaboratively with stakeholders in the drafting of new regulations attached to the bill. Only then will the minister's objective of improving the passenger experience be met.
Thank you.