Thank you, Mr. Chair.
I first want to thank the committee for inviting me to make a presentation.
Late Flight Claim is a business that helps airline passengers obtain—simply, quickly and without risk—financial compensation or a refund after a flight has been cancelled or is late.
Last time I had an opportunity to appear before a House of Commons committee was during the study on Bill C-49, aiming to implement a protection regime for airline passengers. We then critically assessed that bill's shortcomings. We raised the fact that a number of points benefited and protected airline companies more than consumers. The complexity of that piece of legislation and its regulations would open the door to a number of interpretations and encourage airline companies' refusal to provide compensation or a refund, although we had been promised a simple regime that would be ahead of various international programs.
The current crisis is unprecedented and has heavily impacted the aviation and tourism industry. It has highlighted the shortcomings of the current protection regime, the processes, the control measures and the organizations in charge of its proper operation.
The government and the Canada Transportation Agency have been slow in taking steps to protect consumers. Very early at the beginning of the crisis, the European Commission and the U.S. Department of Transportation stated that air carriers must reimburse consumers for unused flight portions. Not only was this not the case in Canada, but the CTA even encouraged consumers to settle for future travel credits and mentioned they should respect the fare rules in place.
In addition, while other countries were implementing clear directives forcing airlines to refund unused portions of tickets purchased, “the CTA quickly took [temporary] steps to address the significant impacts on the airline industry”. One of the things the agency did was apply a temporary exemption on the obligation to provide compensations or to provide new protection for passengers through other airlines.
The CTA additionally gave carriers a deadline extension to respond to passengers' compensation claims. Airline companies had until October 28, 2020, to respond to all compensation claims that had been backlogged since March 25, 2020, or that had been submitted between March 25 and September 29, 2020. That represents nearly a 700% extension of the deadlines.
The agency ordered that the processing of all requests for dispute resolution before the agency concerning airlines be suspended until June 30, 2020, including all requests received under the formal dispute settlement during the suspension period.
So the agency hurried up to implement measures to protect airline companies to the detriment of consumers. One has to wonder what the Canada Transportation Agency's role is and who benefits from it.
During his presentation, Mr. McNaney, from the National Airlines Council of Canada, mentioned that foreign companies that received support were starting to take parts of the market. However, Air Canada, which was in a good position in terms of cash flow at the beginning of the crisis and which has gained several billion dollars in cash flow since, in addition to the billions of dollars in non-refunded tickets, is probably better positioned than others to face this crisis, proportionally speaking.
Moreover, I am astounded when I see a company, on the one hand, asking for public assistance to survive and, on the other hand, offering a gold plated pension of several million dollars to its outgoing president.
And what if this was not just a matter of finances? Would it not be connected to the fact that clients are better protected and helped by different entities?
As you know, travellers expect a certain level of service, and I am not talking about a five-course meal served on board with nice plates. They just want to be able to talk to someone when they have a problem or to be reimbursed when services are not provided. Unfortunately, all too often, certain Canadian carriers have neglected their duty in both cases. The same goes for organizations in charge of regulating and protecting consumers. The situation was already noticeable well before this crisis began.
The longer we wait, the more consumers lose out, as do all other players in the value chain. This situation that has persisted puts undue pressure on service providers such as travel agencies and agents, insurance providers, as well as credit card companies. They should not have been paying for the lack of clear guidelines and airlines' inability to meet their commitment.
In closing, I would like to remind the committee of the fact that, before this crisis, when the airline industry was at its peak and had record sales and profits, a number of situations showed that short-term profit superseded services provided to consumers, who were all too often taken hostage through decisions related to business operations.
What will happen now, following cost and staff cuts, and with the two airlines about to be merged, which will result in less healthy market competition, which is already restricted in Canada, in addition to increasing a number of risk factors?
I have heard various stakeholders mention, at different meetings of this committee, to what extent the airline industry is Canada's economic backbone. Must we hit a wall to realize what consequences our decisions have, thereby jeopardizing an entire industry?
Thank you.