When an airline sells you a ticket, it contracts to transport you from Point “A” to Point “B” at a specific price.


Years ago, airlines would honour those contracts by providing alternative transportation, accommodation and meals in circumstances where that contract could not be honoured because of weather, mechanical problems or other.


Sadly, we have allowed them to ignore their contractual responsibilities for the last few years as many of them disappeared, faced dramatic financial restructurings or succumbed to Draconian cost and service-cutting measures to make themselves more price-competitive.


On Thursday of this week, Air Canada announced that it is launching what in effect is an insurance program designed to underwrite its contractual obligation to honour its transportation commitments.


For a $25 to $35 dollar service fee, (depends on the length of trip), Air Canada will ensure that travelers who have their trips interrupted by weather or mechanical problems will have priority access to customer service representatives who will help arrange alternative flights, complimentary hotel accommodations, car rentals and complimentary meals.


The insurance must be purchased when tickets are issued. In the event of a flight disruption, an insured traveler would be able to call a dedicated Air Canada customer service line to air his/her complaints or find alternate flights, lodging, etc. Presumably, others would be left to their own devices.


On the surface it looks like a good idea for customers who are willing and able to pay the premium. Air Canada rationalizes the fee on the basis that those who are not willing to pay it benefit from the cost savings.


I would argue that when you pay someone to transport you from A to B and particularly when you pay them in advance of your transport, they have an obligation to get you to your destination without additional cost or unreasonable disruption.


We know how frustrating it can be when travel plans are disrupted by factors beyond the airline's control, such as bad weather or air traffic delays and we know that weather is not an airline responsibility but transportation is their responsibility.


It’s one thing to offer multiple layers of service and charge extra for premium services. It’s quite a different thing to offer transportation at a discount price and then ignore your promise to deliver the service because the weather gets bad. Air Canada rewards those who travel at off-peak times.


That makes sense.


It also has a bizarre pricing practice that penalizes people who have to travel on short notice or make changes to their travel plans.


Example; a few weeks ago, I was in Toronto. I had a late afternoon flight to Ottawa but I arrived at the airport early afternoon. I checked in and asked the attendant if I could get on an earlier flight. She said yes, there were lots of seats but if I wanted to go earlier, it would cost me an extra $158. How stupid is that?



Had Air Canada put me on the earlier flight, they would have had an opportunity to sell another seat. Instead, they flew an empty seat on the earlier flight and lost a potential replacement sale on the later flight.

It doesn’t stop there. Two days later, I called about changing my flight from Ottawa to Moncton. Yes I could do that but it would cost me an extra $357, more than double the original purchase price. Go figure.


Air Canada argues that its weather-insurance program is simply an extension of its pay-per-service structure already in use. “Travelers who purchase lower-priced fares pay additional fees if they want to choose their seats in advance” check their baggage or enjoy an on-board snack.



This trend is part of what Air Canada calls the “democratization of airfares” an evolution of air travel from what used to be an elite service for the super wealthy to a service that is available to the masses at an affordable price. What a crock!


It’s true, air travel has become a commodity and competition is based mostly on price.
It’s also true that when price responds to competition, quality of service usually declines. In respect to the insurance fee, we are not talking about an extra in-flight service. We are talking about funding the failure of a carrier to honour a purchase and sale agreement relating to transportation.


Air Canada has noted that in the event of flight disruption or cancellation, rebooking on the next available flight has been standard procedure for years but in the new world of democratization, the airline will have limited capacity to rebook passengers, especially on another airline, if they don’t have flight interruption insurance.


This sounds a bit blackmailish to me.


Why not build the $25 into the base fare for everybody.

W.E. (Bill) Belliveau is a Shediac resident and Moncton business consultant. He can be contacted at bill.bellstrategic@nb.aibn.com Atlantic Insight is a published Blog inventory of opinion articles published weekly in New Brunswick's print media as written by W.E. (Bill) Belliveau, who is a resident of Shediac, New Brunswick, and small business owner, operating his Moncton-based marketing consultancy, Bell Strategic. He can be reached by e-mail at mailto:bill.bellstrategic@nb.aibn.com