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Airlines push case for looser compensation rules amid planned overhaul

Airlines seek looser rules

Aviation companies are making the pitch to Ottawa for looser rules around customer compensation ahead of an overhaul to passenger rights guidelines, even as consumer advocates say some of the airlines' arguments are an overreach.

In submissions and meetings, industry groups warned Canada’s transport regulator that sweeping reforms announced earlier this year will put travellers’ safety at risk and drain carriers of cash after a financially devastating COVID-19 pandemic.

The federal legislation appears to eliminate a loophole through which airlines have denied customers compensation for flight delays or cancellations when they were required for safety purposes — an exemption the sector wants restored so pilots don’t feel pressured to choose between flying defective planes and costing their employer money.

"We want our pilots to be entirely free from any financial consideration when they take a safety-related decision," WestJet CEO Alexis von Hoensbroech said in a video chat from Ottawa this week, where he was meeting with federal ministers on the reforms. The Air Line Pilots Association raised similar concerns in a submission to the Canadian Transportation Agency.

"Regulation should never be punitive for safety decisions," he said.

In the European Union, however, where rules and precedents comparable to the impending passenger rights charter are in place, flight safety remains uncompromised, advocates say.

“Did it make it less safe to fly in Europe? I don’t think so,” said Sylvie De Bellefeuille, a lawyer with the advocacy group Option consommateurs.

The EU code came into force nearly two decades ago, shored up by court rulings that require compensation even for trip disruptions caused by safety concerns, such as mechanical issues. No major accidents involving EU-registered planes have occurred in commercial aviation since 2015.

"It lays pretty ill in the mouth of the industry to say that if you ... take away that excuse then we will therefore fly unsafe planes," said John Lawford, executive director of the Public Interest Advocacy Centre.

"I'm surprised that they would have the chutzpah to say that."

The first phase of reforms comes into effect on Saturday, kicking off a more streamlined complaints process that currently creaks under the weight of more than 57,000 complaints.

That backlog has continued to mount despite a slowdown in filings, which can take up to two years for the regulator process. The new system will be managed by "complaint resolution officers" — 40 have been hired, with 60 more expected to be trained over the next year, according to the agency.

Among the provisions slated to kick in next year are fees imposed on airlines by the regulator to recover some or all of the cost of handling those complaints. If a passenger files one due to a flight disruption or denial of boarding, the reformed rules put the onus on the airline to prove the move was for reasons outside it's control, such as bad weather.

On top of these extra expenses, airlines make the case that regional routes would be pricier for customers — or simply cancelled outright — as slim profit margins would tip into red ink amid higher costs from complaints and fees.

"That could potentially have an impact on regional connectivity and accessibility for routes that might not be as profitable," said Jeff Morrison, who heads the National Airlines Council, which represents airlines including Air Canada and WestJet. "There's always a trade-off."

The average profit on large carriers amounts to less than $10 per passenger, said WestJet's CEO.

"If we have to compensate the passengers, it's thousands," von Hoensbroech said, noting that the average one-way ticket price hovers around $200. "You need many, many flights to recover."

Lawford as well as Air Passenger Rights president Gabor Lukacs deemed the airlines' warnings around routes to smaller or far-flung communities as tantamount to "blackmail."

"If you're cutting regional routes, we're going to open the whole country for more competition," Lukacs said, framing the potential scale-back as an opportunity for other airlines.

He also suggested subsidies to support regional trips, whose fares have shot up over the past four years even as ticket prices on busier routes fell.

Von Hoensbroech also said accountability for flight disruptions — including the cost burden — must be shared across the industry, not borne by airlines alone.

The Canadian Transportation Agency is currently working on a draft of the new Air Passenger Protection Regulations, expected to be published this year before the new charter is implemented in 2024.



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