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Marc Garneau’s airline bill of rights: How to lose friends and alienate people

Saul Klein is the dean of the Gustavson School of Business at the University of Victoria (and a very frequent traveller).

The new airline passenger bill of rights follows hard on the heels of Transport Minister Marc Garneau warning airlines that forcibly removing passengers from planes will not be tolerated in Canada. The legislation sounds helpful, but it is fundamentally misguided. What's next, a diners' bill of rights that encourages restaurants not to poison patrons?

With apologies to Mr. Garneau, the solution does not lie in micromanaging airlines and laying down performance requirements and penalties. Prohibiting overbooking, for example, is not the solution as airlines have a legitimate need to manage their capacity.

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The appropriate response is to increase competition and enforce consumer protection laws, not to allow one-sided conditions of carriage that protect airlines. If you sell a product, you should be obligated to deliver it. If you oversell your flights, you should not be able to make your problem a customer problem. There is no excuse for involuntary bumping. Airlines should have to do whatever it takes to entice passengers to voluntarily move to another flight.

How did we get to a point where common sense has disappeared and we believe that we need more regulation to prevent airlines from behaving badly? Airlines have certainly lost our trust, as shown by their poor ranking on the Gustavson Brand Trust Index. Most rate badly on functional performance and how they treat their customers, as well as on their broader contribution to society; with WestJet being a notable exception.

Deregulation of prices has led to discounting in the airline industry and a race to the bottom in customer service. Airlines have responded to our desire for lower prices by cutting costs, unbundling their pricing strategies and diluting their promises. We may like the lower prices, but having to pay extra to check our bags, select a seat or be fed rankles.

Intense price competition has created a service environment where customers don't trust the airlines to treat them fairly, and unhappy customers don't make life any easier for customer service staff. We are asked to accept the service failures from the airline side, and accept delays and poor treatment, but woe betide the passenger who misses a flight, even if it was because of the same weather delays airlines use to excuse their failures. Penalties and mistreatment are the order of the day, and only the highest-spending customers have any chance to be heard.

Think about those annoying charges for checking luggage. We now see passengers lugging "carry-ons," making the boarding process even more unpleasant and encouraging a rush for the boarding gate to secure that scarce overhead space. Pitting customers against each other is no great recipe for success.

When United Airlines' chief executive referred to passengers being "re-accommodated," he was following a well-worn path of obfuscation and denial. Lying seems to have become accepted practice in an industry in which the passenger is always wrong and "security" is the new response to customer dissatisfaction.

While all this is going on, won't the new legislation help? I fear not. The answer lies in more competition, not more regulation.

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Let's start by applying normal consumer protection laws and removing the special treatment that airlines receive from Transport Canada. We need to allow market forces to fix the problem, not to blunt it. Let's apply competition law more vigorously.

Ownership restrictions prevent foreign buyers from acquiring domestic airlines and restrictive bilateral agreements limit the entry of foreign carriers. Protecting the interests of the airlines, rather than those of their customers, seems to be the driving force. Just because other countries protect their carriers, and disadvantage their citizens, why do we have to do the same?

Passengers need more competition to be able to make real choices and laws need to be properly applied. More regulation is not the answer. Proper competition will force airlines to improve their service and may even make us trust them again.

Video: Garneau says air travel bill addresses compensation for overbooked flights (The Canadian Press)
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