The Canadian Transportation Agency (CTA) has a proposal to charge airlines hundreds of dollars every time the government has to resolve a consumer complaint against an airline, even if the airline isn’t found to be in the wrong. I can’t decide how I feel about this…
Canada wants to shift cost of complaints to airlines
In many countries, it’s possible to file a complaint with the government if you’re unable to resolve a problem with an airline (we have it here in the United States as well). Canada has some consumer protections when it comes to air travel, so if air passengers feel that they’re not getting anywhere by communicating directly with the airline, they can submit a complaint to the CTA.
Along those lines, the CTA has a couple of issues. The first issue is that there’s a massive backlog of complaints — around 78,000, which is the highest ever, and it keeps getting longer. So this makes it difficult for the government to actually process complaints in a timely manner.
The second issue is that this is super costly for the government, and in turn, taxpayers. The agency estimates that it can resolve 22,600 air travel complaints per year, and closing those complaints costs the government around $29.8 million CAD (~$22 million USD). This comes mostly in the form of salaries and benefits for the agency’s resolution officers. That’s right, it costs the government somewhere around $1,320 CAD (~$973 USD) to resolve each complaint.
With this proposal, the government hopes to recoup around 60% of this cost, or around $17.9 million CAD (~$13.2 million USD). The agency would do this by charging airlines $790 CAD (~$583 USD) for each complaint it has to get involved in and resolve. The proposal is that this fee would apply regardless of whether the airline is found to be in the wrong or not.
Another motive here seems to be to encourage airlines to resolve issues directly, and dissuade them from breaking consumer laws.
The CTA has started a one-month consultation period on these proposed reforms, allowing consumers and airlines to chime in with their thoughts on this proposal.
I’m not sure what to make of this proposal
I’ve gotta be honest, I’m not sure what exactly to think here.
On the one hand, it seems absurd that taxpayers are paying over $1,000 CAD per resolved consumer complaint. I suspect in a vast majority of situations, that’s more than the amount being disputed. I suppose that’s what the government is ultimately there for.
Countries spend billions (and tens of billions, and hundreds of billions) as if it’s nothing, so perhaps the government is the right party to be footing the bill. After all, it’s in the best interest of consumers to at least have an agency they can go to when things go wrong with airlines, to keep them honest.
I’d also say that it’s kind of wild that resolving a complaint costs the government so much, but I don’t think that’s anything that’s going to change overnight.
On the other hand, it seems a little ridiculous to charge airlines for consumer complaints, even if airlines aren’t found to be in the wrong. I don’t think this will do much to make airlines act more ethically with resolving complaints, given the backlog of tens of thousands of complaints. It seems like the resolution officers will stay busy no matter what, even if complaints decline. After all, they have years worth of complaints to get to already.
Furthermore, while airlines often are in the wrong, many consumers do take things to the extreme, and have unrealistic expectations from airlines. I imagine when consumers know this policy is in place, they may try even harder to hold it against the airline (“if you don’t resolve my issue I’ll report this to the CTA, and it will then cost you $X”).
Not to feel too bad for airlines, but the airline industry is incredibly low margin, and when you think that airlines could be paying hundreds of dollars to have a complaint resolved, well, that seems a bit much. If this were implemented, it would essentially cost the Canadian aviation industry $17.9 million CAD.
Bottom line
The Canadian Transportation Agency (CTA) has a proposal that would shift the cost of consumer complaints from taxpayers to airlines. The agency essentially wants airlines to pay 60% of the costs incurred from resolving consumer complaints, and that comes out to a whopping $790 CAD per incident.
What do you make of the CTA’s proposal?
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