September 20th, 2019

Consumers could lose in airline sale

By Lethbridge Herald Opinon on June 13, 2019.

That Air Canada is looking to buy Air Transat should have us all concerned and another passenger bill of rights may not actually mean getting compensation.

Competition has a significant impact on prices and Canadians have Air Transat to thank for reducing airfares and making flights more affordable for many.

In addition to Air Canada trying to buy Air Transat, it emerged last week that a real estate developer, Group Mach Inc., is trying to do the same.

Under terms and conditions there is talk of where the head office will be and retention of staff but little about the overall effect on Canadians.

One media report stated consumers would likely see very little change in ticket prices if Air Canada buys Air Transat.

It is staggering that this would even be suggested. Competition always impacts prices – that is the law of economics. Air Canada no doubt will be cautious with prices “initially” but prices will creep up over time.

Most reports indicate there is not likely to be any objection by the Competition Bureau about the deal. That should have us all questioning government funding for the bureau and what its purpose actually is if not to ensure there is fair competition.

The price of milk in Medicine Hat seemed to be climbing on a monthly basis until a new supermarket opened up recently. Once they advertised a really good price on milk other supermarkets were quick to reduce their prices, too.

While on the subject of air travel – Transport Minister Marc Garneau has been talking about and introducing an “improved” passenger bill of rights. This document outlines how airlines must treat passengers if the flight is overbooked, delayed, cancelled, kept waiting on the apron or runway, compensation for lost or delayed luggage and so on.

Regardless of the passenger bill of rights and even standards for compensation, if it is not enforced it is worthless.

There is an informal resolution process with guidelines for airlines and a government office handling this but no enforcement. You only have to listen to CBC’s “go public” regularly to hear that that’s what it often takes to shame an airline into giving compensation in numerous cases.

Gabor Lukacs, an air passenger rights advocate, says the Canadian Transportation Agency’s (CTA) relationship with the airlines is hindering the policing process and he does not hold much hope for things changing.

The new rules expected to be in place this summer indicate an airline could face a penalty of up to $25,000 if it does not comply. Passengers will have to make a complaint to the CTA.

Establishing the standards was probably the easy part but whether the government will enforce any of it is still to be seen.

If it is not enforced by government and passengers still have to hire a lawyer, using money most do not have, nothing has been gained and the passengers are still not protected.

If the sale of Air Transit is allowed to proceed, watch for an increase in air fares. It won’t happen immediately – that would be too obvious – but over time we will be paying more.

Editorial from the Medicine Hat News

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