Tuesday, November 6, 2001

OTTAWA - Today, at a Transport Committee hearing on Bill C-38, which raises the ownership limits in the Air Canada Public Participation Act, Democracy Watch called for the creation of an Air Passengers Organization (APO) in return for the federal government's bailout and other measures that are helping the airlines.

"The federal government is helping the airlines in many ways." said Duff Conacher, Coordinator of Democracy Watch. "The best thing the government can do for passengers in return is to require airlines to facilitate the creation of an air passengers group that will have the broad base and resources needed to hold the airlines accountable for poor service and to ensure that passengers have a strong voice in future airline policy-making."

Under Democracy Watch's proposal, the APO would be created by the method used in some U.S. states to create utility watchdog groups. In these states, utilities have been required to enclose a flyer in their billing envelopes inviting people to join what is called a Citizen Utility Board (CUB). About 4% of consumers usually join the CUB at a $10-15 annual membership fee. CUBs are independent, democratically structured, broad-based watchdog groups that represent consumers' interests in the marketplace. For example, in Illinois the CUB has 150,000 members, a $1.5 million annual budget, and has saved consumers over $4 billion since 1983 by opposing rate hikes by utilities.

To set up the APO, the federal government would require Canada's airlines to distribute a one-page pamphlet to passengers when they board a plane and also through frequent-flyer mailings. The pamphlet will describe the APO and invite passengers to join at an annual membership fee of $20-30. The government can either lend or grant to the APO the funds needed to print and distribute the first pamphlet. After the first pamphlet, however, the APO will pay all the costs of the pamphlet. As a result, the APO can be set up little or no cost to government or the airlines.

If only four percent of the estimated 10 million annual airline passengers in Canada join the APO, it will have 400,000 members and an $8-12 million annual budget.