Q&A: All-inclusive air price advertising

Regulations

Q. What are the objectives of the amendments to the Air Transportation Regulations with respect to all-inclusive air price advertising?

The amended regulations support two key objectives:

  1. Enable consumers to easily determine the total advertised air price. 
    The display of the total price in air price advertising reduces confusion and frustration as to the total price and increases transparency.  It also allows consumers to more easily compare prices and make informed choices.
  2. Promote fair competition between all advertisers in the air travel industry.
    The regulations promote competition by achieving a level playing field for all persons who advertise air prices for travel within, or originating in Canada.

Q. Often, air carriers' advertised prices are no longer available when booking, do these regulations speak to that?

No. The regulations do not address how many seats should be available at the advertised price. However, any limitation on the period during which the advertised price will be offered and any limitation on the period for which the service will be provided at that price is required to be disclosed.

Q. How will the Agency deal with misleading or deceptive advertising?

These regulations were developed for all-inclusive air price advertising and do not deal with this matter. The Competition Act has provisions dealing with this issue.

Q. Where can consumers complain in the case of misleading or deceptive price advertising?

Matters respecting misleading and deceptive acts and practices fall under the purview of the Competition Bureau.

Air price advertisement

Q. What is considered to be advertising?

Advertising is a communication of the air price to the public, either in an interactive or a non-interactive format, for travel within or originating in Canada.

Interactive media include online booking systems and telephone-based services such as call centres and service desks.

Non-interactive media may include:

  • print: newspapers, magazines, billboards, flyers and pamphlets
  • broadcast: television and radio
  • Internet-based formats: tweets, certain Facebook posts and YouTube videos

Q. What must appear in an air price advertisement?

Air price advertising directed at the general public must include:

  • The total price, inclusive of all taxes, fees and charges, which a consumer must pay to obtain the air service. 
  • A minimum level of description of the air service offered, including:
    • the point of origin and point of destination;
    • whether the service is one-way or round trip; and
    • limitations with respect to booking or travel availability periods.
  • Access to a breakdown of the taxes, fees and charges and any optional services offered for a fee or charge.

Q. How must the total price be displayed in an advertisement?

The air price must be advertised in such a manner that a person can easily determine the total price that must be paid to obtain the air service. The total price must be at least as prominent as any other pricing information found in the advertisement and must also be the first price presented to the consumer.

Q. How can I obtain information on taxes, fees and charges?

Specific details need to be made available to the consumer who should not have to search through many layers of the carrier's website to find the information required. If the consumer is directed to a 1-800 phone number, a consumer service representative should be available during regular business hours to respond to questions relating to taxes, fees and charges, and optional incidental services.

Q. Where can I get more information on the regulations? 

You can consult the regulations on the Agency's all-inclusive air price advertising information repository which features background information, questions and answers, and other reference material.

Application

Q. To whom do these regulations apply?

The regulations apply to any person (e.g. individual, company, corporation or partnership, air carriers, travel agents, tours operators, online travel agents) who advertises air prices to the general public, for travel within, or originating in Canada, through any media.

Q. To whom do these regulations not apply?

The all-inclusive air price advertising requirements do not apply to advertisements of prices for:

  • air cargo services;
  • charter services negotiated with a private business or fares available through corporate travel offices (and not available to the general public) or obtained through a global distribution service;
  • prices not available for purchase by the general public;
  • package travel services; or
  • services originating outside Canada.

The Agency considers that the advertising regulations do not need to apply to:

  • Situations where there is a non-monetary component which forms part of the payment towards the purchase of an air service.
    • For example, this would include advertising the price of air services by loyalty reward programs, which require the redemption of points, earned earlier, in exchange for air services.
  • Advertising where the Canadian public has not been targeted.
    • For example, for carriers having multiple, geographically specific versions of their websites, the Canadian version would need to comply.

The regulations also do not apply to services which are excluded from the Canada Transportation Act or the Air Transportation Regulations.  A complete list of those exclusions is available in Section 3 of the Air Transportation Regulations and Subsection 56(2) of the Canada Transportation Act.

Q. What is considered to be a package travel service?

Package travel services involve the bundling of travel services for sale, such as combining air travel, accommodations and/or, where applicable, tour features.  The bundled services are sold to the public as a single inclusive travel package, not as individually priced components that can be selected where air travel is isolated. 

Q. Do the amended regulations apply to foreign carriers operating flights from Canada?

Yes, in instances where advertisers target the Canadian public for flights from Canada, they must adhere to the amended regulations.

Q. Are the amended regulations in harmony with those of other countries?

The Agency undertook an inclusive consultation process and held discussions with other governments both within Canada and abroad before drafting the amended regulations. The regulations create an appropriate level of harmonization with air price advertising formats found in the United States and European markets.

Other jurisdictions have already implemented similar legislative requirements. The European Parliament has had legislation in place since 2008. In the past, the United States imposed some requirements, and as of January 26, 2012, it has further strengthened regulations requiring all-in airfare advertising.

Charges

Q. What is an optional/incidental service and how must it be displayed?

An optional service generally refers to an option, service or amenity offered by an advertiser that can be selected by the consumer and that is supplemental to the services included in the advertised total price. The consumer is not obligated to purchase the optional service to complete the travel at the total advertised price.

Examples of optional services may include checked baggage, unchecked baggage, in-flight entertainment, meals and beverages.

While optional services do not have to be included in the total advertised airfare price, the advertiser must make the consumer aware of these additional costs, and each individual optional service must be displayed as a total price, including taxes, etc.

Q. What is a third-party charge and how must it be displayed?

A third-party charge is any tax or prescribed fee or charge established by a government, public authority or airport authority, or by an agent of a government, public authority or airport authority. Examples of third party charges include: Airport Improvement Fees, Air Travelers Security Charge, Harmonized Sales Tax (HST).

An advertiser must provide a breakdown of all third-party charges under the heading "Taxes, Fees and Charges". However, there are exceptions to this requirement depending on the type of media used to advertise the air service.

Non-interactive media

All advertisements placed in non-interactive media (e.g. newspapers, billboards) must provide an accessible location where the breakdown and amounts of third party charges can be easily obtained. The advertisement might, for instance, make reference to an air carrier's website where a consumer can review the third-party charges or provide a toll-free number a consumer can call to speak to an air carrier representative.

Interactive media

In the case of advertisements via interactive media (i.e. the internet, telephone reservations line, etc.) the breakdown and amounts of third-party charges must be provided in the advertisement. The information can be provided verbally upon request if the information is conveyed over the telephone.

Q. Why are advertisers required to indicate third-party taxes, fees or charges that they do not collect?

As there are different practices among advertisers, this requirement will help the consumer to readily compare airfares, while levelling the playing field between advertisers.

The regulations require the advertiser to indicate to the consumer the name of any third-party taxes, fees or charges which the consumer will have to pay to travel, but which are not included in the airfare. For example, the advertiser would be required to notify consumers about applicable foreign country landing fees.

Q. Will fuel surcharges need to be included in the advertised price?

Yes. The regulations require that the total air price be advertised. As fuel-related surcharges must be paid to obtain the service, they must form part of the total advertised price. Should the advertiser decide to provide a breakdown of these costs in the advertisement, the costs would appear under the heading 'Air Transportation Charges'.  A fuel surcharge cannot be categorized as a third-party tax, fee or charge.

Q. How will advertisers deal with fees or taxes collected by the carrier that are often subject to change?

The Agency recognizes that there are unique instances where some taxes, fees and charges can increase or decrease after the advertiser has posted the advertisement. Should such a change in taxes, fees or charges occur, the advertiser must exercise best efforts to update the advertisement as rapidly as possible.

Compliance

Q. How is the Agency intending to enforce the amended regulations?

Ensuring compliance with the regulations and implementing a program of effective education and enforcement are crucial to the success of the regulatory regime. To support compliance, the Agency will work with advertisers of air prices to provide educational and other guidance material to assist in complying with the new regulations. The Agency is adopting a compliance-based/risk-based approach and intends to work cooperatively with industry, and to use penalties only when necessary to achieve compliance.

The Agency may impose fines of up to $5,000 for an individual and $25,000 for a corporation, where either has been found guilty of an offence as a result of contravening these regulations. In addition, the Agency may order a person to make the changes necessary to conform to the regulations to bring about compliance.

Q. When will the Agency begin issuing administrative monetary penalties?

The Agency expects air price advertisers to comply as quickly as possible with the new regulations. To support compliance, the Agency is working with air price advertisers to provide educational and other guidance materials to assist in the transition. The Agency is adopting a compliance-based/risk-based approach and intends to work cooperatively with industry, and to use penalties only when necessary to achieve compliance.

Q. How does the Agency's penalty system work?

The Agency deals with the penalties on a case-by-case basis, depending on the advertising medium used whether they are interactive such as on-line booking, or non-interactive such as newspapers. The Agency also considers other factors, such as the nature and frequency of the offence.

As a first step in the penalty scale, the first offence is subject to a formal warning. Advertisers who receive a formal warning must become compliant within the specified period of time. A second offence, if there is a second offence, will result in a fine. The Agency may impose fines of up to $5,000 per offence for an individual or $25,000 per offence for a corporation.

We encourage you to consult section 10 of the Interpretation Note for more details.

Q. Some carriers are not yet compliant. What is the Agency doing about this?

The Agency is actively working with advertisers and providing any educational and guidance material that they wish to use in this transition and we are adopting a compliance-based risk-based approach. We expect all advertisers to comply as quickly as possible with new regulations and not to wait for the Agency to take action.

If you have information that a competitor is not in compliance, you can provide us with that information at conformite-compliance@otc-cta.gc.ca and we will take the necessary measures.

Q. A third party is in charge of data provided in my online booking system on my website and I have no control over the time period necessary to comply with the regulation. How will you deal with that?

We understand that making changes to an online booking system can take time and we take that into account when we work towards compliance.

Q. What is the complaint mechanism for a consumer or an air industry stakeholder to file a complaint on non compliance?

Any concerns or complaints can be sent to the Agency at conformite-compliance@otc-cta.gc.ca who has mechanisms in place to address such concerns.

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