Advertised airfares will now include a lot of asterisks and parenthetical explanations.
Ottawa has implemented new rules requiring airlines to advertise the actual bottom-line ticket price – including all taxes, charges and fees. Print advertising, billboards and online ads will also note the cost of those taxes and fees included in the actual airfare.
Regulators are aiming to have more clarity at a time when pricing is often the prime factor used by Canadians in choosing which airline to use.
In anticipation of this ruling, Canadian airlines have already been including these taxes and charges in their advertised ticket prices. However, it could make the advertised airfares of Canadian carriers look significantly higher when compared with international rivals.
Still, the new rules were described Tuesday as a move to help travellers. “We are protecting Canadian air travellers by helping them see, clearly and up front, the full cost of air tickets so they can make informed travel choices,” said Transport Minister Denis Lebel Tuesday.
NDP transportation critic Olivia Chow argued that travellers should have even more protection, such as costs suffered due to delays, lost baggage and cancelled flights.
One sticking point among Canadian airlines about the rules is the fact that the advertised airfares of foreign carriers outside the jurisdiction of this regulation might seem cheaper at first glance.
“That was an argument by some players in the industry, that if we don’t have a means to crack down on the international players, [travellers] won’t be comparing apples to apples,” said industry analyst Robert Kokonis, managing director of AirTrav. “But we have to start somewhere.”
The rules take effect immediately. The advertised ticket price must include airport fees, fuel surcharges, taxes and other automatic costs. But it doesn’t have to include all the many extra fees travellers incur, everything from in-flight entertainment and meal expenses to baggage charges – all at a time when airlines are typically charging for all on-board conveniences.
John McKenna, president and chief executive officer of the Air Transport Association of Canada, noted that many other sectors, such as hotels, don’t have the same kind of regulatory scrutiny. “The air travel industry is an easy target for governments, and we don’t like being singled out. I am not aware of any abuses in our industry as to hidden fees,” he said.
Greater transparency has long been a bone of contention. A decade ago, the Air Transport Association of Canada was arguing that airlines could self-regulate their advertising. However, by 2006, the federal government tabled Bill C-11 to develop airfare ad rules. And by December 2011, the Canadian Transportation Agency was called to draft the regulations now in place.
“We support all-in pricing because we believe Canadians deserve to be able to see the full cost of an airline ticket,” said WestJet spokesman Robert Palmer. “The key is that all companies engaged in the selling of airfares must play by the same rules. The higher, all-in price should be seen across the board, no matter who is advertising it.”
Ben Smith, Air Canada’s executive vice-president and chief commercial officer, said Tuesday, following the announcement of the new discount leisure airline Air Canada Rouge, that the all-inclusive advertised airfare emphasizes all the taxes travellers incur.
“A lot of these are government-imposed taxes and user fees, and it’s our view that the Canadian industry in particular, much more so than a lot of other Western countries, is disproportionately taxed for the privilege of flying,” Mr. Smith said.