Evidence of meeting #70 for Transport, Infrastructure and Communities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was passengers.
A video is available from Parliament.
4:55 p.m.
Senior Director, Government and Industry Affairs, Transat A.T. Inc., Air Transat
In Canada?
4:55 p.m.
Senior Director, Government and Industry Affairs, Transat A.T. Inc., Air Transat
No, we're not aware of them. Obviously WestJet is the second-largest airline in Canada, and I'm sure they would be able to tell you on their own if they have an interest in that, but speaking from Transat, we are always looking at ways of evolving our business model. We don't preclude the possibility in the future, but certainly we have no plans now.
4:55 p.m.
Conservative
Michael Chong Conservative Wellington—Halton Hills, ON
It's safe to say, is it—correct me if I'm wrong—that transborder routes are more profitable than domestic routes?
4:55 p.m.
Senior Director, Government and Industry Affairs, Transat A.T. Inc., Air Transat
I'll look at my colleague Massimo here. Maybe he can answer. We haven't really done an analysis of that.
4:55 p.m.
President and Chief Executive Officer, National Airlines Council of Canada
No, I don't have any data.
4:55 p.m.
Conservative
Michael Chong Conservative Wellington—Halton Hills, ON
I have no further questions, Madam Chair.
Thank you.
4:55 p.m.
Liberal
David Graham Liberal Laurentides—Labelle, QC
Thank you, Madam Chair.
I'll start with Mr. Walker, but I'll open it up to the rest of the panel after that.
I don't know if you heard that last panel, but the IATA told us a few minutes ago that there are two main approaches to passenger rights. One is legislative-regulatory, as we're proposing here, and the other is to tell airlines to please disclose what they are offering when you buy a ticket.
I took that comment as an admission that airlines don't currently do that. They don't currently say what it is you're buying when you buy a ticket. I wonder if you have a reaction to that.
4:55 p.m.
Chief Strategy Officer, National Office, Canadian Automobile Association
I would be speculating. I think there is some level of disclosure, at least to the people who get compensation. I don't know about public disclosure—
4:55 p.m.
Liberal
David Graham Liberal Laurentides—Labelle, QC
Not at that point but at the point when you buy a ticket, what exactly are you buying? If you buy a ticket on an overbooked flight, what you're really buying is a standby ticket and you're hoping to get a flight. You don't find that out until you get to the airport. If you're not an experienced traveller, you find that out the hard way.
What they're recommending is that we have a system whereby we tell airlines they have to be up front about that fact. If they're telling us that we have to do that as a government, that's admitting that they're not doing it themselves. I wonder if you agree with that.
4:55 p.m.
Chief Strategy Officer, National Office, Canadian Automobile Association
Yes, I think that's fair to say. I think it's fair to say that there's probably more that can be done to inform, but I still think there's utility in having some commonality, and not just in terms of that one example. There's a range of issues and it can get pretty complicated if you start putting all of that information on every single possible scenario in the original communication.
4:55 p.m.
Liberal
David Graham Liberal Laurentides—Labelle, QC
Right. It's a matter of making sure that everyone knows what they're getting.
I wonder if the airlines have a comment on this.
Mr. Bergamini or Air Transat?
5 p.m.
President and Chief Executive Officer, National Airlines Council of Canada
I think to your point, more transparency and a greater.... You know the old saying, of course, of buyer beware. A better-educated and better-informed consumer will lead to a more competitive environment. There's no doubt about it.
At the end of the day, what is important to also keep in mind is—I think some of our member airlines spoke to this—the wafer-thin margins on which airlines operate. I think it was WestJet that talked about clearing in terms of profit about $8 or $9 per passenger. That puts into context what we're talking about.
In terms of viewing the industry, I think it's useful to look at it like going to dinner for an all-you-can-eat buffet as opposed to a fancy, five Michelin-star restaurant. You go for the all-you-can-eat buffet and you might need some medication afterwards; there might be a little indigestion. That's the reality, unfortunately, when you operate with those margins where you need volume. That's the reality in which we operate. This is why, as we've said, we have to change the economic foundations on which our system operates. Do that and the picture changes dramatically.
5 p.m.
Vice President, Legal Affairs and Corporate Secretary, Transat A.T. Inc., Air Transat
If I could add to this, Transat is peculiar in the sense that it's not only an airline company. We have travel agents and we're also a tour operator, so we do inform our clients. One of the peculiarities of being a travel agent is that it's your duty to inform your client well.
That is why it is in your interest to deal with a travel agent, because they can explain it all to you.
Can we be better? We can always be better. We at least are trying to be very diligent and give our customers all the information they need so that they know their rights and their remedies.
5 p.m.
Liberal
David Graham Liberal Laurentides—Labelle, QC
Mr. Bergamini, I'm going to go back to you very quickly.
You keep talking about changing the financial plan. Do you have a specific submission to give to us on that, on what needs change and how?
5 p.m.
President and Chief Executive Officer, National Airlines Council of Canada
In terms of changing the system, you can look at the Emerson report. I think we endorse those recommendations.
Let's phase out the airport rents. Let's deal with proper funding for this agency so that we eliminate some of the system's bottlenecks that have cascading impacts on performance right across the system. Let's look at the level of taxation on aviation fuel, both federally and provincially.
Those are all things that would change the dynamics and bring us more in line with our international competitors.
5 p.m.
Liberal
David Graham Liberal Laurentides—Labelle, QC
Thank you.
Mr. Parry, I think you're going to have the last few questions for the last few minutes. I have one I have been wanting to ask you on the cost recovery basis for airports. I come from a large rural riding. I have Mont Tremblant in my riding and it's closer to the cities than most of the small rural airports. What would a cost recovery base actually look like for an airport like mine, which has flights seasonally, once a day or a couple of times a week? If you go further north you have very rare flights, but you still have to provide CATSA services. What would the cost-recovery cost look like in those circumstances?
5 p.m.
Vice-President, Service Delivery, Canadian Air Transport Security Authority
First, it would depend on what the business objectives of that airport are. Specifically, in the case of Mont Tremblant, that's already a designated airport so we provide a level of screening commensurate with the flight volumes and activity it has.
For a non-designated airport seeking to have screening services, it can range, depending on what level of commercial activity it is striving for or achieves.
In all likelihood, and I'll speculate here, because these are smaller non-designated airports, the level of screening they would require would probably, to quantify it, be between one or two screening lines operating several times a week in some cases, maybe five days a week in others, depending on the flight activity. It could range anywhere from $500,000 to $2 million a year.
5 p.m.
Conservative
Joël Godin Conservative Portneuf—Jacques-Cartier, QC
Thank you, Madam Chair.
My first question will go to Mr. Bussières, but first, I would like to provide all members of the committee with some information.
I did some quick research on my iPad. The minister and others mentioned this morning that nothing had been done in the last 10 years. We must not forget that, during that period, the Liberals were in power for two years, but that's another story. The Conservatives were in power for the other eight years and I am going to provide some justification for six of those years.
It must be understood that the aviation industry has evolved a great deal. Let me give you this statistic: from 2010 to 2016, that's six years, the number of flights has increased by 31 million. So the industry had to react and adjust. That is probably what explains why the government has decided to develop a bill in order to improve the situation.
So that is now clear. It's important to put things in perspective so that some people's questions can be properly answered.
As I mentioned, my first question goes to Mr. Bussières, from Air Transat. Let me take a different tack. We are not in a courtroom here; our role is not to accuse this airline of badly managing the crisis that arise from the events that took place in Ottawa. At least, I do not intend to do so. I intend to be constructive.
You happened to experience that situation, but it could have happened to other companies. Actually, no airline is immune to problems like that. You have to react to unique situations, and that is quite legitimate. That said, I hope that your reflex is to put mechanisms in place so that you do not have to experience other similar problems. I am sure that you are not happy to have to manage a situation like that.
Could you tell us what, in your opinion, could be included in the passenger bill or rights to deal with that kind of situation and to minimize the impact on Canadians?
5:05 p.m.
Vice President, Legal Affairs and Corporate Secretary, Transat A.T. Inc., Air Transat
Let me go back to the situation which, thank heavens, is extremely rare. If it were not, we would be talking about it a lot more.
As my colleague Mr. Petsikas mentioned, this is a complex ecosystem. The captains on board their aircraft have to make a decision and, to do so, they need information. The better the information, the better the decision. If the captain can be told precisely how long it will take to refuel the aircraft, it does not matter whether it is 30 minutes, two hours or three hours, everyone's decisions will be better.
At the outset, I have to say that we deeply regret what happened in Ottawa. That is first and foremost. However, I am asking you to consider the background to the situation: no company deplaned its passengers. Everyone was being told that they would be refuelled with the next 30 or 45 minutes. In a situation like that, the captains have a certain mindset: they have to make a decision and to use their judgment that is reasonable in the circumstances. Of course, if the captains are quickly informed of the exact amount of time necessary, the decisions will be better.
As for the passenger bill of rights, situations like that have to be put in context. As my colleagues have mentioned, and I will repeat, the ecosystem is complex; it has links to NAV CANADA, to the airport, and to all the people inside that system. Watching it work is extraordinary. It is fascinating. From 2010 to 2016, the number of flights has increase by 31 million. Considerable organization is needed to get it all rolling. So, touch wood, we have an absolutely extraordinary system. Imagine the risks that all the companies in the sector take in order to make a profit of $8, as was just described.
5:05 p.m.
Conservative
Joël Godin Conservative Portneuf—Jacques-Cartier, QC
Let me stop you there, Mr. Bussières.
What is your advice to us? We are parliamentarians, we are not aviation experts. What items should we ask the minister to include in the passenger bill of rights?
