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News Release

Canadian Transportation Agency Imposes a Time Limit on Proposed Airline Fuel Surcharge

OTTAWA - June 7, 2002 - The Canadian Transportation Agency today issued a ruling placing a time limit on Air Canada's proposed international fuel surcharge.

The carrier, faced with escalating fuel costs, was seeking an open-ended surcharge for tickets issued on or after June 10, 2002. The surcharge would be $15 for a one-way ticket, $30 for round-trip, and would be applicable to all international markets, except between Canada and the United States.

In a previous decision issued on May 14, 2001, the Agency had expressed its concerns about the proliferation of surcharges in the aviation industry, and stated that "... carriers should make every effort to incorporate miscellaneous charges into fare levels and to avoid surcharges."

The Agency is concerned that the ever-increasing use of surcharges limits consumers' ability to compare advertised air fares as the advertised price does not usually disclose the true price that the consumer will have to pay at the time of purchase.

Consequently, the Agency is of the opinion that surcharges should be limited to unexpected situations that are beyond the control of the air carrier and that they should be of a temporary nature. Accordingly, the Agency has ordered Air Canada to modify its proposal to ensure that the new charge will expire no later than 120 days after the proposed effective date of June 10, 2002. This will provide the airline with the time required to deal with the increased cost of fuel in other ways.

The Canadian Transportation Agency is an independent quasi-judicial tribunal that makes decisions on a wide range of economic matters involving federally-regulated modes of transportation, including air, rail and marine.

For further information, please contact:

David Western
Director of Tariffs, Complaints and Enforcement
(819) 997-6643

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