Air Canada says the countrySA国际影视传媒檚 passenger rights overhaul will hardly hurt its bottom line, though the full effect wonSA国际影视传媒檛 be known until implementation next year.
On a call with analysts Monday, chief financial officer John Di Bert said the financial impact of regulatory changes SA国际影视传媒� both rights reforms and stricter rules around pilotsSA国际影视传媒� shift length and rest periods SA国际影视传媒� would put SA国际影视传媒渁dditive pressureSA国际影视传媒� on costs.
SA国际影视传媒淏ut certainly those would be incremental to the current cost base,SA国际影视传媒� he said.
Asked whether the new traveller rights rules would drain hundreds of millions of dollars or mere tens of millions from company coffers, Di Bert replied: SA国际影视传媒淗undreds of millions would feel heavy. But certainly it could have some impacts that may still be felt when we look forward to (2024) and beyond.SA国际影视传媒�
In April, the federal government announced sweeping reforms to the Air Passenger Protection Regulations, with the specifics now being hashed out by CanadaSA国际影视传媒檚 transport regulator.
The changes appear to scrap a loophole through which airlines have denied customers compensation for flight delays or cancellations when they were required for safety purposes.
The new rules also ratchet up the maximum penalty for airline violations to $250,000 SA国际影视传媒� a tenfold increase SA国际影视传媒� and put the regulatory cost of complaints on carriers.
Airlines have pushed back against the existing regime SA国际影视传媒� rolled out in 2019 SA国际影视传媒� as well as the revised one, insisting it will raise costs and unfairly punish carriers who may not be responsible for problems that stem from any one of a number of players in a vast travel ecosystem, ranging from baggage crews to security screeners.
SA国际影视传媒淭his could potentially lead to significantly higher amounts of compensation, significantly higher costs,SA国际影视传媒� said Jeff Morrison, CEO of the National Airlines Council of Canada SA国际影视传媒� which represents four major carriers including Air Canada and WestJet SA国际影视传媒� last month in an interview.
So far, airlines have faced few penalties from the transportation agency for breaches related to passenger compensation for delays and cancellations. The regulator has issued only one, according to Air Passenger Rights advocacy group president Gabor Lukacs.
SA国际影视传媒淚f fines were issued more frequently, airlines would not waste peoplesSA国际影视传媒� money with unreasonably refusing to pay,SA国际影视传媒� he said.
National Bank analyst Cameron Doerksen highlighted several financial pain points at Air Canada, including an upcoming collective agreement for pilots that is widely expected to bring them big gains, given the major wage hikes this year at three major U.S. carriers as well as WestJet.
SA国际影视传媒淲hile the company will face some incremental upward pressure on costs in 2024 due to increased pilot costs as well as higher costs from new passenger protection legislation in Canada SA国际影视传媒� which will impact all airlines SA国际影视传媒� we note that Air Canada currently has about eight per cent more employees than 2019 even though it will fly 12 per cent less capacity this year,SA国际影视传媒� Doerksen said in a note to investors on Monday.
Air Canada took in $16.7 billion in revenue through the first nine months of the year, and net income topping $2.1 billion.
-By Christopher Reynolds, The Canadian Press
