A matter of fair play: Canada and European Union expand protection of air travellers’ rights

Courtesy LaPresse

Flight delays and cancellations may be said to be part and parcel of air travel given that they are happening more often than not.

Take a typical day as 5 August, 2019: According to Cirium, there were 22,386 delays and 1,107 cancellations globally, of which 29 per cent of the combined total occurred in the United States, 26 per cent in Europe, and 34 per cent in Asia Pacific.

But what recourse do affected travellers have in the event that they are inconvenienced?

While the International Civil Aviation Organization (ICAO) recognizes the vulnerability of passengers and supports “due attention… (which) could include rerouting, refund, care and/or compensation”, the agency stops short of spelling out specifically what the entitlements could amount to. Similarly, the International Air Transport Association in voicing support for ICAO’s stand is concerned how the airlines may be adversely affected, seeking “an appropriate balance between protection of consumers and industry competitiveness.”

In the Untied States, for example, there are no federal regulations requiring airlines to compensate passengers when flights are delayed or cancelled, unless they are bumped off a flight due to an overbooking situation. Strictly applied, airlines are not obliged to put you on another airline’s flight.

So too around much of the world, many governments do not legislate on the matter. Different airlines have different policies to handle such situations, but it has always been arguable as to what constitutes fair compensation. And travellers who have been left high and dry are often impotent seeking redress, resigned to the mercy of the airlines.

What air travellers need is an authoritative voice to decide on fair play There is hope however if more regulators will follow in the footsteps of their counterparts in Canada and the European Union which have in recent weeks expanded legislation to protect passengers’ rights.

Canada

The Air Passenger Protection Regulations introduced by the Canada Transportation Agency require airlines affected by flight disruptions to meet certain obligations which will apply to all flights to, from and within Canada, including connecting flights.

Passengers whose flights are delayed or cancelled will be compensated up to C$1,000 (US$756) in accordance with the size of the airline and length of the disruption. Large airlines will pay out more than small airlines: C$400 and C$125 respectively for delays between three and six hours, C$700 and C$250 for delays between six and nine hours, and C$500 and C$1,000 for delays nine hours or more.

Non-complying airlines may be fined up to C$25,000 for non-compliance.

The regulations also cover other obligations such as clear communication and updates, reasonable food catering, the need for ventilation if passengers are stuck on the tarmac, allowing passengers to leave the aircraft if the delays exceed three hours, re-booking and refund. Passengers may be compensated up to C$2,100 for lost luggage and up to C$2,400 if bumped from a flight.

Not surprisingly, the airlines – supported by the International Air Transport Association (IATA) – are saying the rules go too far. Advocates of passenger rights on the other hand say they do not go far enough. But it nevertheless is a step forward.

Europe

The European Union’s regulations have been expanded to include connections even if they are operated by non-EU airlines.

The new regulation states: “In the case of flights with one or more connections that are subject to a single reservation, an operating air carrier that has performed the first flight cannot take refuge behind a claim that the performance of a subsequent flight operated by another air carrier was imperfect.”

The operating carrier will also have to offer passengers alternative transport for the disrupted flight, in addition to compensating them with an amount ranging from US$290 to US$700.

The European Union has been a prominent pusher to protect passengers’ rights. Considering its history of disruptions caused by industrial action by airline and airport staff, this is a welcome move to air travellers.

However, many travellers may be discouraged by the cumbersome claims procedure which may involve a cut by an agency handling the claim on their behalf if they choose to go through a third party, and by the long settlement time of a claim. Still, it is another step forward.

One wonders, if a non-EU airline agrees to abide by the EU regulations for its flights operating into and out of Europe, is there a good chance it would be as amenable to similarly apply fair treatment to its customers outside the region, particularly at its home base?

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Canada’s proposed legislation to compensate passengers for flight disruptions too vague for the purpose

Courtesy Applemark

The Canadian Transportation Agency (CTA)’s proposed legislation to compensate passengers for flight disruptions is a commendable move, but is it good enough?

The draft of regulations seems too vague for the purpose to be truly effective, and if not tightened up would pass as window dressing in an attempt to appease disgruntled passengers while promoting the good name of the movement to protect consumer rights. Airlines may even find protection in the number of loop holes that the clauses open up.

Passengers who are denied boarding because of overbooking could be compensated up to C$2,400 (US$1,782). But for delays and cancellations, while the compensation under certain circumstances has been spelt out, passengers may still end up with the burnt end of the candle with no restitution.

The proposed legislation stated that passengers whose flights have been delayed or cancelled could receive up to C$1,000, depending on the length of the delay and the size of the carrier. But there is a big “if” which is as old as the history of flight disruptions. That is, only if the disruptions are within an airline’s control and not safety-related.

Circumstances beyond an airline’s control usually refer to events such as bad weather conditions including volcanic eruptions and war, such acts that in old aviation etymology are often termed as “acts of God”. But what else may be included has become arbitrary, as when the UK Civil Aviation Authority’s ruled that Ryanair should compensate its customers for flight disruptions caused by strike action by its crew, the budget carrier argued that these were “exceptional circumstances” which should exempt the carrier from meeting its obligations. (Is Strike action by airline crew an extraordinary circumstance, Dec 6, 2018)

CTA will have to be clearer if not definitive about such known circumstances and not leave them to arbitration.

Then there is the other factor of how far you can stretch the definition of “safety-related” disruptions. Most delays may be drilled down to being so classified unless CTA not turn a blind eye to possible interpretations (or misinterpretations) and be satisfied that it has covered as wide a field as it can possibly know in its commitment to the purpose of protecting consumer rights.

For example, if a flight is delayed or cancelled because some assigned crew members are found to be unfit for duty at the eleventh hour for any of a wide range of reasons, is this a safety-related issue and one beyond the carrier’s control for which passengers are to bear the brunt of the misfortune although through no fault of theirs?

The new regulations will also require affected airlines to communicate clearly reasons for cancellations or delays to their passengers, as well as provide them with food, drink and accommodation where appropriate. Nothing new there, although there had been cases of airlines not living up to the expectations particularly when the duration of the delay – sparing a thought for the dilemma of the carrier for which it is costly to keep an aircraft on ground – cannot be ascertained up front.

CTA will now require carriers to disembark their passengers if a flight is delayed on the tarmac for over three hours. Some travellers are already questioning whether the three-hour minimum is reasonable particularly when air-conditioning within the cabins is not functioning.

CTA chief executive and chair Scott Streiner said in a news release: “We’re committed to finalizing a set of minimum airline obligations that are clear, fair and balanced as soon as possible.”

These will be exactly the words that will shape the question in the mind of many consumers: Are the clauses clear, fair and balanced? For now, as the draft stands, the loop holes are too visible not to be ignored.

And for many sceptic consumers, they are already resigned to the possibility of airlines raising their fares to cover hypothetical costs of compensation in the event that they are forced to oblige. That, you may say, with a sigh if you must, is the axis on which a business turns.

Baggage Woes

Courtesy Ryanair

Ryanair

Ryanair flew into a rough patch with Italian antitrust lobbyists following its decision to levy new fees for hand luggage. Unless you pay €6 (US$7) for priority boarding, you will be allowed to carry only one piece of hand luggage, which must be able to fit the space under the seat in front. Any second piece (up to 10 kg) to be checked in will be at a cost of €8.

Antitrust advocates said this could amount to unfair commercial practice as hand luggage should be “an essential element of transport”. It would distort fares and make it difficult for comparison across the industry.

In defence Ryanair said its policy was intended to “improve punctuality and reduce boarding gate delays”. In fact, it maintained that it would not make any money out of it and may in fact lose revenue when more passengers switched to carrying smaller bags instead of the the normally larger suitcases which must be checked in at a higher fee.

However, research by US travel consultancy IdeaWorks suggests that a third of the airline’s profits came from so-called “ancillary revenue” comprising £1.7 billion (US$2.2 billion) from charges for add-ons such as checked baggage and seat selection last year.

Swoop

Across the pond in Canada, new Calgary-based budget carrier by WestJet is also facing complaints about fees charged for a carry-on bag. The fee is C$35 (US$27) if paid in advance, C$50 if paid at the time of check-in at the airport, and C$80 at the gate.

Passenger rights advocate Gabor Lukacs has filed a complaint with the Canadian Transportation Agency, claiming that this is unlawful since the Canada Transportation Act requires domestic airlines to offer a basic fare for travel within the country that has no restrictions with “reasonable baggage”.

As in the Italian argument, Lukacs finds Swoop’s practice “deceptive”. While what constitutes “reasonable” may be debatable, the general rule thus far has been that the allowable one piece has to fit in the overhead compartment or under the seat. Ryanair has restricted the carriage at no fee to the space under the seat, but Swoop is not even considering that. In defence, Swoop says it is “confident that Canadians are appreciative of the ability to be in control of what they pay for.”

American carriers

Meantime south of the border, American carriers are taking turns to up their checked baggage fees. American Airlines joined JetBlue, United Airlines and Delta Air Lines in raising their fees from US$25 to US$30 for the first bag, and from US$35 to US$40 for the second bag. Budget carriers Spirit and Frontier are already charging between US$40 and US$50 per bag. For now, Alaska Airlines has kept its fees at US$25 for the first and second bags, while Southwest Airlines still allows passengers to check in two bags for free.

These fees generally apply to travel within North America and to destinations in the Caribbean. Internationally, the likes of United Airlines cannot afford to ignore the competition especially in Asia where many legacy airlines such as Singapore Airlines and Cathay Pacific are still generous with free carriage of two checked bags.

Indeed, ancillary services have become a significant billion dollar business world-wide in an airline’s portfolio as more operators including legacy airlines go “a la carte” to keep the fare seemingly low but charge extra for features that used to be part and parcel of the normal ticket price. And the list is getting longer to include also priority check-in, priority seats (with more leg room), meals and headsets. It will not stop growing as the permutation multiplies, as can be seen in the different ways charges are applied even within the same service category, such as the baggage fees imposed by Ryanair.

Did Air Transat flout Canadian aviation rules?

Courtesy Air Transat

Following up on complaints about the delays of two Air Transat flights on July 31 at Ottawa International Airport, Canada’s air transportation agency is said to be investigating whether Air Transat has flouted the rules. (See Air Transat delays raise passengers’ ire, Aug 2, 2017)

The agency said the airline signed a document that sets out, among other things, an airline’s rights and responsibilities towards its passengers. According to that tariff, in the case of an on-board delay of more than 90 minutes, Air Transat promises to offer passengers the option of getting off the plane.

Air Transat’s defense was that the exceptional congestion at the airport because of several flight diversions caused by bad weather at Montreal had resulted in airport staff not being able to cope with providing bridges for disembarkation. This claim was refuted by the airport authority, which maintained that air stairs and a gate were available but the airline did not make the decision to disembark its passengers.

It was not until a passenger on one of the two delayed Air Transat flights called 911 that emergency crew finally brought bottled water to the stranded passengers cooped up in the aircraft without air-conditioning.

According to Ottawa Airport spokesperson Krista Kealey, emergency crews had to deal with several medical calls and getting the Canada Border Services Agency to approve the opening of the cargo hold to check on a pet. The aircraft also had mechanical issues and needed to be refuelled.

The first Air Transat flight from Brussels sat on the tarmac for six hours after a journey of some nine hours. The second flight which was similarly diverted from Montreal was delayed for four hours.

The airport said there were 20 diversions, not 30 as claimed by Air Transat.

Air Transat said the situation was beyond its control. Yes, the weather bit, but the contention is its failing in not attending to the needs of its customers as a consequence. It is likely that following investigations by the transport agency, Air Transat may be required to compensate its passengers if it had not already thought about it. But this may again be a long road to resolution dependent on the terms of carriage.

Low-cost carriers that offer attractive travel packages may not be as equipped as full-service airlines in handling unexpected situations arising from delays and cancellations. And that’s not saying full-service airlines are necessarily better at the job all the time although it is expected so, since they are more likely to have the resources to deal with unplanned situations. Besides, from the customer’s point of view, that’s the price of their willingness to pay a higher fare.

Still, whether you fly low-cost or full-service, it is good to know your rights. And transport agencies administering civil aviation may be the traveller’s only hope of protecting his or her rights when it comes down to a case of David vs Goliath.

Enter the ultra-budget airline

Courtesy NewLeaf

Courtesy NewLeaf

LESS than a month after Canada’s latest carrier Airlines revealed plans to offer ultra-low fares operating from its base in Winnipeg to six cities within the country, namely Abbotsford, Halifax, Hamilton, Kelowna, Regina, and Saskatoon, it announced it was “temporarily postponing service” and would refund all transactions already made. The first service was to be launched in February.

Newleaf’s fate now rests in the hands of the Canadian Transportation Agency (CTA) which is reviewing the carrier’s aviation licence. Apparently Newleaf was selling seats through a charter arrangement with Kelowna-based Flair Airlines Ltd which held the CTA operating licence. The question is whether the indirect Newleaf should itself be holding a licence directly.

Newleaf CEO Jim Young’s reaction was one of optimism. He said: “We welcome a regulatory system in which businesses like ours can thrive in Canada as they do in other countries.”

That aside, the ultra-budget airline that is sometimes referred to as a discount airline is not an entirely new phenomenon. In his somewhat premature announcement of the launch of the airline, Young said: “Lower landing fees mean we have savings we can pass on to you.” The key word is “affordability”. According to him, “Ultra low-cost carriers are some of the most financially successful airlines in the world today.”

Young may be referring to operators such as Iceland’s WOW Air and the longer haul Norwegian Air Shuttle. WOW Air, for example, is offering US$99 fares connecting Boston and San Francisco in the US with the Icelandic capital Reykjavik. It is next looking at connecting with Montreal and Toronto in Canada.

While you might remind Young of how as many airlines so-called budget too have come and gone, Newleaf is already expressing interest to expand its operations to other destinations within Canada and in the United States.

Young, who was at one time CEO of Frontier Airlines, explained: “By unbundling the entire service you get to choose what you want.” That basically is the budget model, and one that is further trimmed down on costs. As an example, he cited how NewLeaf would be able to save money in part because it does not offer its seats on any third-party travel websites, which charge airlines a fee to post and make sales there. Considering the nature of its operations, that makes economic sense. After all, Young did not see Canada’s two other major carriers – Air Canada and Westjet – as Newleaf’s competitors. He said: “If I had a competitor, it would be the airlines that Canadians are driving across the border for.” He was referring to Canada’s loss of market share to US airlines such as Allegiant Air operating out of airports south of the border, close enough for Canadians to drive across to take advantage of the lower fares.

Young added: “We’re looking to create a new market and stimulate people who aren’t flying today. What I’m going after are people that will make the three-and-a-half hour drive in the middle of winter to go to Grand Forks because they’ve got to get to some place warm or can’t afford to fly from here.”

That argument about developing new market has been the slogan of many a budget upstart, and which has contributed to the success of some of them to go where the full service airlines would not go. Newleaf is therefore targeting a limited but niche leisure market on the back of a strategy that focuses on second-tier airports. It can count on that as a strength to drive its growth, particularly at a time when it could take advantage of the current low fuel costs. Too many no-frill operators in the past had been hit badly by soaring oil prices. The challenge for Newleaf will come when other upstarts similarly motivated jump into the same arena, or when one of the legacy airlines decide that the market has grown big enough for them to join the competition most probably through a subsidiary offshoot such as Rouge, the budget arm of Air Canada.

Legacy airlines across the world have become increasingly wary of the growth of the budget carriers, particularly after the 2008 global economic crisis when air travel trended downwards to cheaper fares. Budget carriers are now competing in the same market, not only for seats in the traditional economy class but also for travellers who want some perks but at lower fares as they introduce their version of business class. North American domestic operations by the major airlines are already adopting the budget model to charge for meals and baggage among a slew of chargeable.

The temptation of growing bigger than intended is always present. This unbridled ambition has led to the downfall of many operators in aviation history, perhaps the reason why the doyen of the budget model Ryanair remains undecided whether it should launch long haul services across the Atlantic, and why some discount carriers such as Allegiant have stayed small. Will Newleaf, when granted the licence to operate, given its ambition to expand far and wide, go down this same road?

Perhaps not, as it would appear that the current budget model exemplified by carriers such as Ryanair and easyJet is not trim enough, and if lower cost will stimulate demand, there is room for Newleaf to grow. Yet one begins to wonder how much lower you can go.

This article was first published in Aspire Aviation.

Canada moves to raise awareness of air travellers’ rights

THE Canadian Transportation Agency has set up an online tariff repository to raise air travellers’ awareness of their rights so that they can make informed choices when booking to fly with a particular airline.  The repository also contains information on the terms and conditions of carriage of each airline.

The information can be accessed at the Agency’s website: http://www.otc-cta.gc.ca/eng/air-carrier-tariffs-posted-websites.

The Agency said: “Tariffs are key provisions with respect to air passenger rights in Canada. Consumers have the right to access a carrier’s tariff, know what a carrier’s terms and conditions of carriage are and what a carrier’s obligations to them are when they travel by air.”

This is a continual effort on the part of the Canadian authorities to protect consumers’ rights, which across the globe are often compromised by air carriers refusing to admit responsibility for flight disruptions and inconveniences caused to their customers that may be within their control. Passengers may not be aware of the implied agreement in the fine print, which, frankly, is rarely read by most customers. Yet they may have been misled or caused to misunderstand the terms of carriage.

In an earlier initiative, the Agency had wanted all carriers to display prominently information about the rights of passengers who are travelling with them.

There is so much that the Agency can do to raise the awareness of air travellers to their rights. Those who believe that airlines are not living up to their obligations may complain to the Agency, which, for example in the case of a tariff complaint about non-application or unreasonable and unjust applications, can enforce the application of certain tariffs.

All’s well and good, and the Agency should be commended for moving to protect the rights of air travellers and give them a little more bite in their justified complaints against airlines that fail to honour their obligations. The next issue is the difficult one, i.e. enforcement, something which the European Union watchdog has been grappling with even though that it has guidelines on the amount of compensation to be made good to customers by airlines in specific cases of default.

By the way, airlines can also access the repository to compare their tariff provisions with those of their competitors.

Canada moves to protect passengers’ rights

THE obligations of airlines to compensate passengers for disrupted and cancelled flights has long been an elusive subject, and definitely one clouded with fuzzy arguments that make it difficult to implement any clear solutions or remedial action.

The Canadian Transport Agency is making another go at protecting passengers’ rights, saying that in the event of an overbooked, delayed or cancelled flight, passengers should be given the option of a full refund and a free trip home if the occurrence jiggles up their travel plans. Airlines may be required to book stranded passengers on the first available flight, even if it means on a competitor’s flight.

The screws have been made tighter in that passengers would be entitled to a full refund compared to the past practice of airlines reimbursing only the unused portion of the itinerary. Of course, there is the exclusion caveat of disruptions caused by circumstances outside the airlines’ control such as inclement weather and security issues.

CTA’s regulation would affect Canadian airlines, namely Air Canada, Westjet and Air Transat. The agency had already in the past made it a necessary condition for their operations to visibly display their obligations such that passengers are aware of their rights.

As experienced by the European Union (EU) for some years now, implementation is going to be a challenge. The EU has threatened to resort to legal action against airlines that do not comply with its rules. For example, EU rules require that passengers must be reimbursed for hotel accommodation and meals for the whole period that they are stranded but some airlines will only pay for 24 hours.

Airlines are unhappy with the rules, expressing concern that there is no limit to what they have to pay out. This has resulted in a backlog of claims that for some airlines accumulated for as many as 500 flights. In the end, passengers are no better off than they were, in a continuing and enervating battle whose sign of victory, if any, constantly eludes them. For both parties, fortunately for the airlines and unfortunately for their customers, time is the great healer.

But it remains a worthy pursuit, purely in the name of fair play.