CTA Cracks Down on Air Services Advertising Requirements

The Canadian Transportation Agency has warned that it will use a stricter approach in enforcing the all-inclusive price requirement on air services advertising instituted in December.

A notice to that effect was issued last week, following a series of warnings and monetary penalties slapped on travel providers.

New rule requirements
The new rule requires all advertisers of air services – for both domestic and international travel originating in Canada – to include in the advertised or quoted price all taxes, fees and charges that consumers must pay for that service.

The rule covers every type of advertising and service provider, ranging from print and television ads to call centers and service desks, as well as Facebook posts and Twitter Tweets.

“The Agency’s stricter approach means that the Agency will not be granting any extended periods for compliance, as advertisers are now expected to comply immediately and are required to remain compliant,” said Chantal Laflamme, manager, issues management and outreach at the Canadian Transportation Agency in Gatineau, Quebec.

Warnings issued
Not all advertisers have, in fact, complied with the new rule. So far, the agency has issued 42 formal warnings and two monetary penalties – one to itravel2000.com and another to FlightNetwork.

Itravel2000.com did not comply with the all-inclusive price requirement even after multiple contacts and a formal warning from the CTA advising it to amend its on-line booking system. Its lack of cooperation and failure to comply within the deadline established in the warning resulted in a monetary penalty of $40,000.

FlightNetwork complied with its on-line website but failed to comply on its mobile website and was issued an $8,000 penalty. Both companies, however, are now fully compliant with the all-inclusive price requirement.

Benefit for agents
“Monitoring air price advertising will be an on-going effort that will help us reach our goal of price transparency,” said Geoff Hare, chair and CEO of the CTA. “This will ensure consumers can easily determine the total price of advertised air services, and will promote fair competition in air price advertising.”

It is also of great benefit to travel agents, who often have to deal with the fallout from misleading advertising. It’s just the first step, however, since the rule does not cover travel packages – only airfares.

“It’s time that travel companies, airlines and tour operators recognize that the consumer is not dumb and knows that the lead-in prices they’re using are not the real prices,” said Ron Pradinuk, president of Renaissance Travel in Winnipeg, Manitoba.

“It (the new rule) is changing the thinking. The primary benefit is that the travel agent is no longer the scapegoat. That’s always been the biggest problem. The tour operators are phony in the way they’re marketing prices. When a customer calls, they get ticked off and go after the travel agent, even though they know it’s not the travel agent’s fault. The sooner everybody does it (all-inclusive pricing) the better.”