ACTA: Canada’s New Airfare Ad Rule Won’t Stop ‘Abusive’ Behavior
by Nick VerrastroThe Canadian government’s new regulation on all-inclusive airfare advertising is not broad enough to protect agents and consumers from “abusive” practices by tour operators using charter airlines, according to the Association of Canadian Travel Agents (ACTA).
The Canadian Transportation Agency’s new regulation, scheduled to go into effect later this year, will not prevent tour operators with charter airlines from cancelling flights at will, leaving agents holding the bag and ruining consumers’ vacation plans, ACTA said.
Not everyone agreed. Flight Centre Canada, one of the country’s largest travel retailers, said the regulation will level the playing field for airlines and travel agencies. It announced that it is now advertising all-inclusive pricing, including all taxes and fees, on all the travel products it sells.
Broader regulation needed
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While ACTA supports the move for fare transparency, the organization is calling for legislation that will protect consumers from “abusive” practices of charter carriers, often owned by tour operators, ACTA president David McCaig told Travel Market Report.
“ACTA believes a broader regulation should be applied to include both scheduled and charter air carriers to force them to be more responsible for their actions, which would allow our members to give their clients the peace of mind they need when planning large group events,” he said.
Wedding group in jeopardy
As an example of what can go wrong, McCaig cited a charter carrier’s recent cancellation of a flight on which a travel agent had placed deposits for 43 passengers in a wedding group. The agent was not informed of the cancellation until she called to book four more passengers.
The cancellation would have required a change of the wedding date. It also would have a $400 fare increase for each passenger already deposited and would have affected clients who already had booked flights from Australia and Europe.
ACTA worked with the tour operator to fix the situation, but McCaig wondered where the line is between prudent business practice and abusing a tour operator’s customers.
Agent holds the bag
The travel agent, not the tour operator or its charter airline, is the one who looks bad in these cases, he said. The travel agent also incurs lots of extra work rebooking clients – in addition to assuaging disappointments that are not the fault of the agent.
“The agent has done everything right” and has made bookings in good faith but is left holding the bag when the tour company cancels a charter, McCaig noted.
ACTA has received overwhelming support from Canadian travel sellers both for talking with suppliers about such practices and for lobbying the Canadian Transportation Agency to regulate charter carriers to protect consumers, according to McCaig.
While cases such as the large wedding group draw attention, the many occasions when individual travelers suffer cancellations or poor treatment go unnoticed, McCaig said.
Flight Centre’s new policy
Meanwhile Flight Centre Canada launched its “Price You Pay” strategy. The policy is in response to customer feedback regarding the often significant disparity in pricing when taxes and surcharges are far greater than the base fare price, Flight Centre said in a statement.
Flight Centre had been advertising air fares with applicable taxes and fees listed as a separate component. This was to remain competitive with federally regulated airlines that were not required to display taxes and fees, Flight Centre said.
In some Canadian provinces, travel agents are required to advertise all-in airfare prices, putting them at a competitive disadvantage with airline websites that are regulated by Canada’s national government and can advertise base fares, excluding fuel surcharges and fees.
‘Levels the playing field’
The government’s new regulations requiring Canadian air carriers to include all associated fees and taxes in their advertised prices will address this problem, said Flight Centre president Greg Dixon.
“Now that airlines will be forced to be transparent when advertising, it levels the playing field for travel agencies who have been at a considerable disadvantage having to show all-inclusive pricing in certain provinces for years,” he said.
“Of particular concern is the application of fuel surcharges as separate amounts. These surcharges are what make up a major portion of the taxes but really should be included in the base airfare.”
