Air Canada fails transparency test during fuel surcharge hike
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Air Canada fails transparency test during fuel surcharge hike
May 19, 2008

Air Canada failed the test of transparency by not being up front enough in informing the public about new fuel surcharges, industry observers said late last week.

Unlike rival WestJet, Canada's largest airline has made little mention of the reintroduction of a substantial increased cost of flying. The primary reference is buried in link on its website once consumers establish the final cost of their travel.

Calgary-based WestJet, by contrast, has informed consumers about the surcharges in a news release, newspaper advertising and on the main page of its website.

Airline industry observer Joseph D'Cruz of the University of Toronto's Rotman School of Business says Air Canada has hurt its public image by not adopting sufficient transparency in adopting fuel surcharges.

"It's just a poorly handled public relations activity," D'Cruz said in an interview.

Air Canada has altered its fuel surcharge policy three times in recent days. Last week, it first matched U.S. carriers by introducing a three-tier fare for transborder travel between Canada and the United States. It then extended the surcharge structure to domestic travel.

Once WestJet followed up with lower levels on medium and longer distance flights, for competitive reasons Air Canada matched those amounts and adopted a single $40 charge for one-way transborder flights.

The two airlines now have identical surcharges for domestic flights: $20, $30 and $45 depending on distance.

While the surcharges may have little short-term impact on consumer behaviour, the extra costs and vast difference between advertised fares and final costs could have a significant long-term impact on air travel, D'Cruz added.

Air Canada spokeswoman Isabelle Arthur said the airline hasn't hidden the fuel surcharge.

"It's at the forefront of everyday life for everyone ... and our fuel surcharges are indicated at the time when you buy your airfare."

While the airline has noted on its website policy changes regarding unaccompanied minors and additional baggage charges, it has failed to mention the surcharge.

We don't put out press releases for every policy or fare change," Arthur added.

Air Canada CEO Montie Brewer recently mused about adopting a dynamic surcharge that could adjust in a timely manner, much like gas companies change pump prices.

But Arthur said these constant adjustments aren't possible at this time "for logistics reasons.

WestJet spokesman Richard Bartrem said the airline decided from the outset to be totally transparent about the new surcharged.

"We said we would be very forthright about it and if oil comes back down to 2007 prices, we will review to an eye of taking it off," he said.

Robert Kokonis of the airline consulting firm AirTrav Inc. said consumers shouldn't have to dig through a website's fine print to learn about charges and added costs.

I think Air Canada should be totally open," he said in an interview from Paris.

"If you treat your customers like adults and just be up front about that, I think people will feel better."

Source: http://nbbusinessjournal.canadaeast.com

FlyForLess is not affiliated with any media companies nor does it represent or work for Air Canada. This article is published with the sole purpose of making information available for those who wish to stay informed on Air Canada's actualities.

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