Social media and "free" flights will be scrutinized as the Canadian Transportation Agency kicks off consultations on Monday to draft regulations by the end of 2012 to require domestic airlines to market full fares to consumers.
The CTA is asking for submissions to determine what constitutes advertising for the purposes of drafting rules, notably whether Twitter and Facebook pages run by airlines should be governed by new regulations. The agency would have the power to enforce penalties of up to $25,000 for each infraction.
The quasi-judicial tribunal will also examine whether to require that ads promoting free trips through loyalty reward programs such as Aeroplan and Air Miles prominently disclose hidden taxes, fees and surcharges.
The CTA's consultation process comes on the heels of Air Canada and Porter Airlines Inc. implementing "all-in" airfares in their print advertisements and websites last week. As well, WestJet Airlines Ltd. began running newspaper ads last month with all-inclusive fares and will broaden the initiative to its reservation system later this year.
While Canadian airlines have resisted changes in their ads for years, the adoption of all-in pricing by operators in foreign jurisdictions – notably the United States and Europe – has paved the way for its implementation here.
The CTA emphasizes that it's important to forge ahead and get feedback from the travel sector and consumers to draft rules to make all-inclusive airfares mandatory for domestic carriers.
"The collective input from this consultation process will be extremely valuable to the agency in developing effective regulations," CTA chairman Geoff Hare said in a statement. The agency is gathering input on its website from Monday until Feb. 26. "We are taking an inclusive approach," Mr. Hare said.
The carriers say they are on board this time because many foreign carriers have moved to all-in airfares and travel agencies will be part of new regulatory discussions.
Porter started showing "one price" on all-in, one-way fares last Friday. By contrast, Air Canada's ads display the all-in ticket price in larger type and the base fare in smaller print. Air Canada's all-in ticket prices are based on one-way flights for North America and sun destinations, while round-trip fares are listed on overseas routes.
"What should be included in the advertised price? One-way or return?" the CTA asks.
Prior to the decisions by WestJet, Air Canada and Porter to advertise full ticket prices, the carriers had promoted airfares before factoring in taxes, security levies, fuel surcharges, airport improvement fees and airline charges for air navigation services.
"The agency will be consulting widely, including industry stakeholders, consumer groups and all interested individuals through a number of channels. The agency will host an online forum, invite written submissions and will meet key stakeholders from the air industry and consumer groups," the CTA said.