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Airfare advertising: Fewer surprises in store (eventually)
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By Liam Lahey | Insight
Call it a win for the overcharged Canadian air traveller. Starting this week, if you're flying south to the U.S., airlines are now required by law to tell consumers exactly what they'll pay for airfares including taxes, administration and baggage fees when promoting their prices.
Implemented by the U.S. Department of Transportation (DOT), the passenger protection rules are shaking up the travel industry. The DOT initially outlined the fair price advertising initiative and other consumer protections in mid-2010.
Through comparing airfare and estimating total payments will now become easier, airlines can still add fees along the way on everything from onboard Internet access to in-flight entertainme nt to food and drinks.
Canadian airlines oppose transparent advertising?
Canada is trailing the U.S. in establishing more transparent airfare pricing. It's been said Ottawa will implement regulations requiring all Canadian airlines to follow suit and include all fees and taxes in their advertised prices. But it won't happen until late 2012 at the earliest. Naturally, that raises questions as to why, given Canada's lock-step approach to nearly all things American, we've failed to implement transparent pricing yet.
"It's primarily because of opposition from the airlines," explains Michael Janigan, executive director and general counsel, the Public Interest Advocacy Centre in Ottawa. "The airlines felt that they needed to misrepresent the price of airfare to be successful in selling tickets."
George Petsikas, president of the National Airlines Council of Canada (NACC) in Ottawa, strongly disagrees. He says there's been an evolution in this ongoing debate. The legislative foundation has been in place for a few years but the provision in the law that deals with all-inclusive airfares was suspended.
"There are reasons previously why some airlines expressed concerns about moving forward before major jurisdictions such as the United States and the European Union went to that sort of regime," he explains. "We didn't want to be an island with all of these little rules while one's competitors offshore are not subject to the same rules for a variety of reasons in their markets. Air transport is a globalized market."
The NACC's membership includes Air Canada, Air Transat, Jazz Aviation LP, and WestJet.
A month ago it was announced by Transport Canada (TC) that Canada will proceed with regulations requiring Canadian air carriers to include all fees and taxes in their advertised prices. TC has commenced consultations with stakeholder groups to see what form Canadian consumer protections for airfares will take.
The notable exception here is Quebec: Under that province's general consumer protection legislation those rules are founded and Janigan says Quebec has commenced enforcement proceedings against some airlines.
What can Canadians expect?
What will the new TC-mandated rules actually do when they come to light? Janigan says he expects them to be on par with provincial legislation governing travel agencies.
"It'll certainly have to be as restrictive as current legislation in Ontario and Quebec regarding travel agents and advertising all-in pricing," he tells Yahoo! Finance Canada. "I'd expect it to be as rigorous as that and certainly rigorous enough that Quebec would be content."
Petsikas adds the federal government is moving ahead with its plans and that the NACC will work within that process and that it does indeed support the principle of transparent, all-inclusive pricing in this country.
"We're currently engaged in the consultation process with the regulatory authorities. There's a fairly tight turnaround deadline to get this out the door by the end of this year," he says. "We've said very clearly, we'd like something that more or less works towards a harmonization of rules. We don't want to see another set of rules at the federal level that we already have provincially in Ontario and Quebec or in the U.S. It's a question of which regime makes more sense to harmonize with."
Another key concern for the NACC and its members is ensuring any new all-in rules are applied to all airlines operating in Canada, not just Canadian-based ones.
"All carriers, not just Canadian domestic, but also foreign, U.S., offshore-based carriers operating in Canada are subject to these rules and are subject to them and that the Canadian Transportation Agency has an effective means of enforcing those rules," he says. "We do not want an un-level playing field in that respect."
For the time being, Canucks seeking a deal on flights within Canada or who are bound for destinations beyond the United States will have to continue deploying various strategies to score the bargain they seek.
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