As the Canadian Transportation Agency (CTA) reviews changes to its Air Passenger Protection Regulations (APPR), the head of The International Air Transport Association (IATA), Willie Walsh, has shared his two cents on Canada’s air travel compensation policies in an op-ed piece published this week.
In a Nov. 6 article posted to NationalNewsWatch.com, Walsh, IATA’s director general, accuses the Government of Canada of “back peddling” in its efforts to improve aviation.
Walsh begins by noting how the deregulation of the airline industry, which began more than 30 years ago, led to lower fares, more flights, a bigger choice of airlines.
“Air travel became more affordable and more convenient for Canadians. That’s hugely important for a country as vast as Canada,” Walsh writes.
But then, earlier this year, Ottawa announced that it will require airlines to compensate passengers for delays and cancellations, even in cases where the airline neither caused nor contributed to a disruption.
The proposed amendments to the Canada Transportation Act will, in turn, put the onus on airlines to show a flight disruption is caused by safety concerns or reasons outside their control, with specific examples to be drawn up by the CTA.
“No one enjoys having their flight delayed or cancelled,” Walsh writes. “And there are widely reported examples where passengers affected by delays have not received the treatment they deserve.”
Walsh goes on to say that these situations are “rare,” noting IATA’s last survey of Canadian travellers, where 93 per cent said that they were satisfied with their last trip.
If, however, there is bad weather, a mechanical issue, or inadequate staffing levels, fully meeting passenger needs can be a challenge, Walsh says.
“In these instances, airlines recognize their duty of care and provide their customers with appropriate meal vouchers and hotel accommodation,” he writes.
But now the government wants airlines to pay penalties in addition to hotel and meal care, Walsh explains.
“If there is a rain delay for a baseball game, you may get an option of a ticket refund, but nobody would expect a baseball club pay a penalty to fans,” Walsh argues. “And, similarly, it is not right to require airlines to compensate travellers for situations outside their control either—when the weather does not cooperate, or air traffic control cannot handle traffic volumes.”
With this in mind, mandating financial compensation by airlines beyond the cost of the ticket “does nothing to address passenger inconvenience,” Walsh argues.
“It does not improve the air travel system. And it is not equitable,” he writes. “Travellers recognize this.”
He says when IATA surveyed Canadian travellers, 90 per cent agreed that all parties involved in a delay or cancellation should play a role in helping affected passengers.
“That does not happen today; and it won’t happen with the government’s proposed regulation,” Walsh writes.
Sending the wrong signal
An even “more concerning” point is Ottawa introducing penalties for punctuality, as it “sends the wrong signal on safety.”
“Surely no one would want airlines to be punished for a zero-tolerance approach to managing safety risks that has made aviation the safest mode of travel,” Walsh writes.
The Director General goes on to say that Canada already has proof that its proposed approach “does not work.”
In 2003, the EU implemented a similar scheme that resulted in billions of dollars of increased costs for airlines which they have limited ability to absorb, Walsh writes.
“So passengers effectively paid for the compensation in their air fares,” he says. “And, without any incentive for ATC to improve the root causes of delays were never addressed.”
“The result: delays and cancellations increased. So the policy objective was not met.”
The European Commission, meanwhile, has outlined needed changes to the regulation, including a list of extraordinary circumstances, such as safety-related incidents, under which airlines would not be responsible for compensation payments, Walsh points out.
“Canadians depend on a robust commercial aviation system, both in major metropolitan and remote areas,” Walsh writes. “Mandating compensation to passengers that could far exceed the cost of their loss during a delay or cancellation will lead to higher airline costs.”
“And some communities may well see air service shrink if the costs of managing compensation become too great. Canada needs reliable world-leading air services.”
“The government’s current plan will move Canada in the wrong direction.”
Calls for shared accountability
The argument echoes one that WestJet’s CEO Alexis von Hoensbroech has been making for some time now.
In past statements, von Hoensbroech has called for shared accountability across the entire travel ecosystem when it comes to delayed or cancelled flights.
“There's airports, there's navigation, there's security, there's border control, there's ground handlers," von Hoensbroech told media last February, noting that those departments aren’t subject to the same rules and regulations as airlines.
“Whatever happens, it's always the airline, and the airline basically becomes the insurance company for the entire industry,” the CEO said at the time.
The CEO made his case again at a lunch event at the Toronto Region Board of Trade last month.
“Why does a passenger only get compensation on management failures that we do, but not get compensation on management failures that NAV Canada does?” the CEO said. “I think it's absolutely unfair to guests. They should always be compensated if there's a management failure, full stop. And we will be ready to pay it out. But then we would like to recover it from NAV Canada, in this particular example.”
Speaking to PAX at that event, von Hoensbroech said it’s “time to pause and rethink how our regulation should look like and actually benefit the consumer.”
The current model is going to “cost a lot of money” and lead to higher ticket prices, he said.
“Without shared accountability, no one should expect to see any significant improvements,” he said.
Sharing Walsh’s opinion piece on X, the platform formally known as Twitter, on Tuesday (Nov. 7), von Hoensbroech wrote that “any regulation has to be carefully crafted, otherwise it won‘t improve air travel and cause [unintended] consequences.”
Under the current APPR system, a passenger is entitled to between $125 and $1,000 in compensation for a three-hour-plus delay or a cancellation made within 14 days of a scheduled departure unless the disruption is outside the airline's control, such as weather or a safety issue (like mechanical problems).
The amount can vary, depending on the size of the carrier and length of delay.
The changes that are currently being reviewed by the CTA aren't expected to come into effect until 2024.