reprinted from the Toronto Star
Ottawa investigating airline ads
By Susan Pigg, Toronto Star Transport Canada and Ottawa's competition watchdog are reviewing the way airlines in Canada advertise their fares after numerous complaints from frustrated consumers that the prices they read in newspapers and online are misleading. The probe will examine if airlines are making false or misleading representations by advertising one-way fares to, for example, Vancouver for $229 that end up being almost $600 by the time travellers add the cost of the return leg, taxes and airport improvement fees plus air navigation, fuel, insurance and security surcharges. There are also concerns about whether some airlines, dominant carrier Air Canada in particular, are misleading travellers by advertising cheap one-way fares but requiring consumers to buy a return ticket to qualify for those special fares. Transport Minister David Collenette made quick reference to the review yesterday during a speech to the 16th annual Canadian Airline Investment Conference in Toronto. Federal officials confirmed later the review could set standards for how airfares are advertised. But the issue isn't an easy one, one federal official stressed. "The first thing you have to ask is whether this is misleading advertising. If it's not misleading advertising because there's lots and lots of small print, then the second question we have to ask is, are there unrealistic notions of what it costs to fly." A number of people at the conference criticized the growing number of surcharges, especially airport improvement fees and the new security fee, for pushing up airfares and hurting demand on short-haul routes. "When did airports become high-priced strip malls?" Barry Lapointe, president and chief executive officer of Kelowna Flightcraft Group of Companies, asked in a speech critical of both Ottawa's new security surcharge of $12 each way and escalating spending on fancy airports. He accused Canada's major airports, through the airport authorities that run them, of raising millions of dollars each year from airline travellers through improvement fees. He said they treat airlines, which have virtually no say in how that money is spent, as "a vehicle to transport (fee-paying travellers) from one airport authority to another." Collenette, on the other hand, called Canada's airports "a great success story," adding he's "very proud" of the fact they've raised $5.5 billion in bonds and equities on the money markets and spent $5 billion on infrastructure improvements. WestJet Airlines chief executive Clive Beddoe also urged a major reduction in spending by airport authorities, calling them an "unregulated monopoly" and citing $9 million in improvements taking place at Calgary's airport. "There's no need for some of these
expenditures. They're out of control." |