WestJet CEO asks feds to allow compensation cost sharing after flight delays

WestJet Airlines is asking the federal government to allow airlines to recover passenger compensation costs from other aviation industry partners, if it believes those partners played a role in causing flight delays or disruptions.

The CEO of the Calgary-based airline, Alexis von Hoensbroech, made the comments in Calgary on Wednesday during a Chamber of Commerce event.

He said while he supports the air passenger bill of rights instituted in Canada in 2019, which outlines how airlines must communicate and reimburse or compensate travellers for everything from delayed flights to damaged luggage, airlines don't operate in a vacuum.

"There's airports, there's navigation, there's security, there's border control, there's ground handlers," von Hoensbroech told reporters, adding that none of these parties are subject to the existing air passenger protection regulations the way that airlines are.

"Whatever happens, it's always the airline, and the airline basically becomes the insurance company for the entire industry," he said.

"If you want an aviation sector that collectively produces a reliable product for our guests, then there has to be some shared accountability."

Thousands of Canadians have suffered through airport backlogs and flight delays in the last year, as the country's pandemic-ravaged aviation sector has at times struggled to keep up with a dramatic resurgence in demand for air travel.

Compensation sharing 'very difficult,' expert says

Under the country's existing Air Passenger Protection Regulations, travellers can apply directly to the airline for compensation if a flight is delayed for more than three hours for an issue that is within the carrier's control, but not related to safety.

Some passenger advocates have suggested that in addition to compensating travellers, airlines should be subject to stiff monetary penalties if they don't live up to their obligations under the passenger bill of rights.

John Gradek, a lecturer in the aviation management program at McGill University, said it would be much too complicated for compensation costs to be shared among different agencies and businesses in the aviation industry.

"It would not be an easy system to administer," Gradek said.

"It would be a very difficult system to really find out, you know, the root cause, who, what agency or what entity is really causing the delay."

Gradek said the reasons for flight disruptions can vary, from delays in catering to de-icing to baggage-belt breakdowns. So finding the right place to lay blame for individual complaints can be a long and complicated process.

"I think it's fair that, you know, the airlines front the bill for fines because the airlines should have known and do know … the state of the aviation community in the airports in which they operate," Gradek said.

"If the airlines have a problem with the state of repair or the state of staffing at an airport … it's for the airline to talk to the airport and get that straightened out."

Gradek said it would also be a difficult process for air travellers if there were multiple different types of complaints they could file both with airlines and airports.

Von Hoensbroech declined to say exactly how much WestJet has paid out in passenger compensation in the last year, but said the figure is substantial.

"It was a significant double-digit millions figure that we encountered last year," von Hoensbroech said, adding that when airlines are forced to bear a financial burden of that size, they eventually have no choice but to increase fares.

"There is a time lag between these things, but eventually we will have to factor the costs into the ticket price, of course," he said.

"Because in the end we have to recover all our costs, including compensation."

Thousands of air travel complaints in backlog

Von Hoensbroech's comments come as Transport Minister Omar Alghabra has vowed to strengthen the air passenger bill of rights, in the face of criticism from passengers who are dissatisfied with the current system.

Alghabra said last month that the Canadian Transportation Agency (CTA) was dealing with a backlog of approximately 42,000 air travel-related complaints from passengers, and he promised an additional $75.9 million for the quasi-judicial body to help it speed up the processing of claims.

Von Hoensbroech said that while WestJet isn't trying to shirk its responsibility to passengers, it is hopeful Alghabra will introduce a mechanism allowing airlines to share the costs of compensating travellers with whichever party caused the problem — whether that be a backlog at customs or a broken-down piece of baggage-handling equipment in an airport.

"From what we're hearing, this is a concept that they (the federal government) are pursuing. But I don't know the timing of this," he said.

But according to Gradek, it's the whole air travel complaint process that has to change.

Pre-pandemic, he said, the CTA would receive a few hundred air travel complaints a year. But with the thousands it's receiving as travellers return to airports, the system must adapt to handle the increased volume, Gradek said.

He argued the aviation industry should have an appeal board that's financed by industry members — just like other federally regulated industries such as telecommunications and banking. 

"It's time that we take this burden of going through appeals away from the taxpayer and make it go to the airlines," Gradek said.

"They're the ones that caused it in the first place. So, let them pay for the appeal process."