Determination in from Canadian Transportation Agency on Basic Fare Requirements

In the May 10, 2019 edition of ACTAVision, ACTA shared our submission to the Canadian Transportation Agency (CTA) on the request for stakeholder feedback on the basic fare requirement, including the circumstances in which an air carrier should be exempted from identifying a basic fare in their tariff. https://www.acta.ca/actavision/2019/0509/actavision_0509.html

Outcome

Earlier this week, the CTA rendered a Determination regarding the “basic fare” requirements. ACTA recognizes, and as stated in our submission to CTA in April 2019, that the tariff obligations for an air carrier under the Act, especially with respect to section 67 (1)(b) are outdated based on air travel in 2019. Competition in Canada overall, is beneficial to consumers and in order to increase competition, the interest to provide air services may come from low or ultra-low cost carriers. In this case, these business models would not be compliant with the current rules and therefore, it would make sense to provide exemptions until such time as the legislation can be amended. ACTA’s recommendation is that the legislation be reviewed to modernize and make it relevant to the current air travel business landscape. 

While the definition for basic fare remains status quo, ACTA supports the findings of CTA. ACTA’s primary concern as it relates to the rules surrounding basic fares was with the surcharges collected by airlines outside of the base fare.  Taking a closer look at some of these additional surcharges, a customer can expect to pay navigational and fuel surcharges. What ACTA member Travel agents and their consumers question is why fuel is deemed a surcharge. In order to fly the aircraft, fuel is required. Instead, some airlines promote the base prices artificially low and difficult for consumers to make accurate comparisons. That said, ACTA understands that the CTA does not regulate the pricing of tickets or have authority over the fares unless it becomes an issue with monopoly routes and as such, the air carriers have the freedom to price their tickets as they choose. However, while the Act states that the “want” for reasonable baggage be included in the base fare, ACTA believes that the “need” for fuel is necessary and therefore should be automatically included in the base fare.

What does this Determination mean?

In this case, SWOOP has been granted a specified period of time to respond to the Determination. ACTA will monitor SWOOP’s response and thereafter, advise members of how they are going to be able to comply with the CTA rules.


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