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.