Decision No. 333-C-A-2006

June 8, 2006

File No. M4370/05-51590

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COMPLAINT

[1] On December 21, 2005, Wesley Burwash filed with the Canadian Transportation Agency (hereinafter the Agency) the complaint set out in the title.

[2] On January 11, 2006, Agency staff requested that Air Canada address the complaint within the context of subsection 67.2(1) of the Canada Transportation Act, S.C., 1996, c. 10 (hereinafter the CTA).

[3] On February 7, 2006, Air Canada requested an extension until March 11, 2006 to file its answer. In Decision No. LET-C-A-49-2006 dated February 17, 2006, the Agency granted this extension.

[4] On March 9, 2006, Air Canada requested a further extension until March 31, 2006 to file its answer. In Decision No. LET-C-A-80-2006 dated March 21, 2006, the Agency granted the requested extension.

[5] Air Canada filed its answer on March 30, 2006, and Mr. Burwash submitted his reply to Air Canada's answer on April 10, 2006.

[6] Pursuant to subsection 29(1) of the CTA, the Agency is required to make its decision no later than 120 days after the application is received unless the parties agree to an extension. In this case, the parties have agreed to an extension of the deadline until June 16, 2006.

ISSUE

[7] The issue to be addressed is whether Air Canada's increase in charge, from $40 to $105 one-way, for the carriage of animals in the passenger compartment of aircraft, as set out in the carrier's Domestic Passenger General Rules Tariff No. CDGR-1 (hereinafter the tariff), is unreasonable or unduly discriminatory within the meaning of subsection 67.2(1) of the CTA.

POSITIONS OF THE PARTIES

[8] Mr. Burwash submits that he does not understand how Air Canada can justify more than doubling the fee for bringing an animal as carry-on luggage into the passenger compartment. Mr. Burwash states that Air Canada does not provide any additional service when transporting an animal as carry-on baggage than it does when carrying books or clothing as such baggage. Mr. Burwash notes that in reply to a complaint that he filed directly with Air Canada, the carrier advised that the fee increase was prompted by the rising cost of fuel, among other elements. Mr. Burwash argues that it is unfair for passengers who choose to take an animal with them as carry-on baggage to assume the burden for everyone else, and that whether carry-on baggage includes a pet or regular items, such as books, should make no difference to Air Canada's costs.

[9] Air Canada submits that it incurs extra costs in verifying the appropriateness of the kennel/bag in which the animal is being carried, as per standards established by the International Air Transport Association and Canadian regulations, and in occasionally undertaking extra cleaning to remove animal hair or other effects of the animal in the passenger cabin.

[10] Air Canada submits that its charge for the carriage of animals as carry-on baggage should not only be compared to the charge imposed by other Canadian carriers offering domestic services, but also to the respective fees assessed by carriers offering services in the North American market, as Air Canada does not segregate the domestic market from the Canada - United States market. Air Canada provides the following list of charges applied by air carriers:

Canadian Carriers:

• WestJet: CAD$40 for domestic carriage
• CanJet: CAD$40 for domestic carriage – Due to space limitations, CanJet does not accept pets for travel to or from the United States.

Other North American Carriers:

• American Airlines: US$80/CAD$109 for North America
• Jet Blue: US$50
• Continental Airlines: US$80
• Delta Airlines: US$50 for North America
• Frontier Airlines: No animals allowed in cabin
• America West: US$80
• Northwest Airlines: US$80/CAD$123 for North America
• United Air Lines: US$80/CAD$125 for North America
• US Airways: US$80 for North America
•  Southwest Airlines: No animals allowed in cabin

[11] Air Canada asserts that the foregoing demonstrates that its increased charge for the carriage of animals in the passenger compartment is well within the average market price, and that no carrier offers the service for free.

[12] Air Canada also submits that the one-way charge of $105 for the carriage of animals in the passenger compartment is applicable to all passengers who wish to bring an animal onboard and, therefore, the charge is neither undue, nor extends an unreasonable preference or advantage to or in favour of any person. Air Canada maintains that the charge is based on rational commercial and operational requirements of the carrier, is comparable to market rates and, as such, is not unreasonable.

[13] Mr. Burwash argues that Air Canada has not provided an explanation as to why the charge for animals in the passenger compartment has nearly tripled, and that he has never personally had his kennel/baggage inspected or had any extra services provided that would justify the current fee level imposed by Air Canada.

[14] Mr. Burwash maintains that Air Canada's comparison of charges with carriers in the United States is unwarranted because, for security reasons, these carriers have a greater need to limit and control baggage than Canadian carriers, and that he would expect carriers in the United States to charge more than Canadian carriers because of this need. Mr. Burwash also explains that he is only concerned about travelling with his animal within Canada and, therefore, what carriers in the United States are charging is irrelevant. Mr. Burwash submits that both WestJet and CanJet charge $40 for carriage of animals in the passenger compartment, and that Air Canada has no valid justification to increase its charge to $105 to match the average charge within the North American market.

ANALYSIS AND FINDINGS

[15] In making its findings, the Agency has considered all of the evidence submitted by the parties during the pleadings. The Agency has also examined Air Canada's terms and conditions pertaining to the carriage of animals in the passenger compartment as set out in the carrier's tariff.

[16] The Agency's jurisdiction over complaints concerning domestic tariffs is set out in section 67.2 of the CTA. Pursuant to subsection 67.2(1) of the CTA, the Agency may take certain remedial action following receipt of a complaint where the Agency finds that the holder of a domestic licence has applied terms or conditions of carriage applicable to the domestic service it offers that are unreasonable or unduly discriminatory. More particularly, subsection 67.2(1) states that:

If, on complaint in writing to the Agency by any person, the Agency finds that the holder of a domestic licence has applied terms or conditions of carriage applicable to the domestic service it offers that are unreasonable or unduly discriminatory, the Agency may suspend or disallow those terms or conditions and substitute other terms or conditions in their place.

[17] Rule 200, Conditions and Charges for Acceptance of Live Animals, of Air Canada's tariff provides, in part, that:

(A) General Conditions of Acceptance

Carriers will accept domestic cats, dogs, and household birds for transportation. The acceptance of animals is subject to the conditions below.

[...]

(D) Charges for the Carriage of Animals

The animal and its container will not be included in determining the free baggage allowance and will always be subject to a charge of CAD105.00/USD 75.00

Is Air Canada's charge for the domestic carriage of animals in the passenger compartment, as set out in the carrier's tariff, "unreasonable" within the meaning of subsection 67.2(1) of the CTA?

[18] In Decision No. 666-C-A-2001 dated December 24, 2001, the Agency had an opportunity to examine the scope of the word "unreasonable" found in subsection 67.2(1) of the CTA.

[19] In that Decision, the Agency stated that in determining whether a term or condition of carriage applied by a carrier is "unreasonable" within the meaning of subsection 67.2(1) of the CTA, the Agency must ensure that it does not interpret the provision in such a way that impairs or jeopardizes the ability of the travelling public to efficiently use the recourse put in place by Parliament to protect it against the unilateral setting of terms and conditions of carriage by air carriers. The Agency is of the opinion that the same applies in this case.

[20] Conversely, the CTA dictates that the Agency must also take into account:

• the operational and commercial obligations of the particular air carrier that is the subject of the complaint;
• the other consumer protection provisions found under Part II of the CTA which compel air carriers to publish, display or make available for public inspection tariffs that contain the information required by the Air Transportation Regulations, SOR/88-58, as amended and only apply the terms and conditions of carriage set out in those tariffs; and
• the fact that air carriers are required to establish and apply terms and conditions of carriage designed to apply collectively to all passengers as opposed to one particular passenger.

[21] The Agency is therefore of the opinion that in order to determine whether a term or condition of carriage applied by a carrier is "unreasonable" within the meaning of subsection 67.2(1) of the CTA, a balance must be struck between the rights of the passengers to be subject to reasonable terms and conditions of carriage and the particular air carrier's statutory, commercial and operational obligations.

[22] In the case at hand, Air Canada increased the charge for the carriage of animals in the passenger compartment from $40 to $105, one-way. As all carriers that offer such a service charge a fee for the service, and as Mr. Burwash acknowledges that charging a fee is justified, the issue is the amount of the fee being charged.

[23] It is evident that the charge assessed by Air Canada is higher than that applied by WestJet and CanJet; however, this fact, in itself, is not sufficient to conclude that Air Canada's charge is unreasonable.

[24] The Agency is of the opinion that, generally, air carriers should have the flexibility to price their services as they see fit, subject to legislative or regulatory constraints. The Agency is also of the opinion that, in the present case, Air Canada's charge for the carriage of animals in the passenger compartment must be viewed in the context of Air Canada's whole network and the charges imposed by the carrier's competitors throughout this network, rather than solely to the charges assessed by carriers that primarily operate within Canada. As a major international carrier, Air Canada has an operational structure that differs from other domestic carriers, such as WestJet and CanJet. When compared with the charges applied by such carriers as American Airlines, Inc., United Air Lines, Inc., and Continental Airlines, Inc., which all charge US$80.00 for carriage of animals in the passenger compartment within North America, Air Canada's charge of CA$105.00 is similar.

[25] In the present case, and in light of the foregoing, the Agency is of the opinion that the balance between the right of passengers to be subject to reasonable terms and conditions of carriage and the carrier's need for flexibility in the interest of maintaining a viable commercial operation is maintained. There is no doubt that it is in both the carrier's and the travelling public's interest to keep charges at the lowest possible level so as not to deter passengers from travelling with animals, while recognizing the need for carriers to offset increasing costs of operation. In the present case, the Agency finds that Air Canada's charge for the carriage of animals in the passenger compartment strikes an acceptable balance between the carrier's need to be viable and the passengers' desire to be exposed to reasonable charges.

[26] In light of the foregoing, the Agency finds that Air Canada's charge of $105 for the carriage of animals in the passenger compartment is not "unreasonable" within the meaning of subsection 67.2(1) of the CTA.

Is Air Canada's charge for the domestic carriage of animals in the passenger compartment, as set out in the carrier's tariff, "unduly discriminatory" within the meaning of subsection 67.2(1) of the CTA?

[27] As with the word "unreasonable", the phrase "unduly discriminatory" is not defined in the CTA. In Decision No. 666-C-A-2001, quoted above, the Agency also had an opportunity to examine the scope of the words "unduly discriminatory" found in subsection 67.2(1) of the CTA.

[28] In that Decision, the Agency stated that in determining whether a term or condition of carriage applied by a carrier is "unduly discriminatory" within the meaning of subsection 67.2(1) of the CTA, it must adopt a contextual approach which balances the rights of the travelling public not to be subject to terms and conditions of carriage that are discriminatory with the statutory, operational and commercial obligations of air carriers operating in Canada. This position is also in harmony with the national transportation policy found in section 5 of the CTA. The Agency is of the opinion that the same applies in this case.

[29] The first question for the Agency to consider in determining whether a term or condition of carriage applied by an air carrier is "unduly discriminatory" within the meaning of subsection 67.2(1) of the CTA is whether the term or condition of carriage is discriminatory.

[30] A term or condition would be discriminatory if it singled out a particular category of traffic for different treatment for reasons that could not be justified. In the present case, given that Air Canada's increased charge for the carriage of animals in the passenger compartment applies equally to all passengers, the Agency finds that there is no evidence before it to suggest that this condition of carriage is discriminatory or that the condition has been applied in a discriminatory manner.

[31] Given the Agency's finding that Air Canada's charge for the carriage of animals in the passenger compartment is not "discriminatory" within the meaning of subsection 67.2(1) of the CTA, the Agency need not examine the question of whether the applicable tariff provision is "unduly discriminatory".

CONCLUSION

[32] Based on the above findings, the Agency hereby dismisses the complaint.

[33] It is noted that since the filing of this application, Air Canada has announced that effective September 18, 2006 the carriage of animals in the passenger compartment of aircraft will be discontinued system-wide, for tickets purchased on or after April 14, 2006 for travel commencing on or after September 18, 2006. Certified, professionally trained service animals which are assisting customers with disabilities will continue to be carried, free of charge, in the passenger cabin at the customer's feet except for flights to Australia, Hawaii, Hong Kong and New Zealand.

Members

• Gilles Dufault
• Guy Delisle
• Beaton Tulk