Bill C-49 will be a game-changer for air travellers and airlines alike. While passengers will no doubt delight in new compensation for lost bags, airlines are understandably embracing the change with less enthusiasm. Any regulatory reform is a pain for implementation and compliance. We get it. And yet this new act also offers extraordinary opportunities to reevaluate the status quo and soar to new heights of customer experience. This can be a breeze with a clear path forward and the tools needed to get there. Before we start sweating about how to comply, what is Bill C-49, why was it implemented, and what does it mean for the airline industry?
What is Bill C-49?
Bill C-49 is an amendment to Canada’s Transportation Act (CTA), which passed the House of Commons and the Senate last year. It received Royal Assent in May 2018 and will soon be the law. Also referred to as the Transportation Modernization Act, the Bill addresses a range of transportation industries. As part of the Minister of Transport’s commitment to air passengers’ rights – outlined in Transportation 2030: A Strategic Plan for the Future of Transportation in Canada – it will mean a host of changes for the airline industry.
Coming into force in summer 2019, these changes will shift passengers expectations and how airlines do business. They include:
- a new regime for air passengers’ rights
- amending what “Canadian” means to ease restrictions on foreign ownership
- changes to the way airlines do business with each other that impact competition and the public interest
Airlines must soon provide the government with information about “passenger experience and the quality of service.” (CTA, s 50(2)(d))
Furthermore, and central to this article, deep in Subsection 50(2)(d), Bill C-49 makes more significant, long-term changes. That part of the Transportation Act now stipulates that airlines must provide the government with “information respecting the performance of air carriers […] with regard to passenger experience and the quality of service.”
New regulations taking flight
Like all Acts, Bill C-49 and the Transportation Act are general and put into action through more specific regulations. This one gets off the ground through the Department of Transport’s Transportation Information Regulations now in draft form. These work in tandem with Canada Transport Agency’s Air Passenger Protection Regulations also published at the end of last year. Data reported by airlines will be used to measure the efficacy of, and compliance with, the new Air Passenger Protection Regulations.
According to a first draft of the Transportation Information Regulations, data collected will “ensure more accountability and transparency” by collecting data on “air passenger experience and publicly reporting key performance metrics.” It mandates reporting a range of data, from performance to baggage handling to complaints. These sorts of detailed reports are new for Canada and represent new involvement of the Government in consumer rights.
A new public role in customer rights
With the passing of Bill C-49, the Government of Canada has signaled a new interest in protecting consumer rights as they relates to transportation. When presenting Bill C-49 in the House of Commons, Hon. Bill Morneau said it: “would provide assurance to Canadians that if they choose to travel by air, they would be aware of their rights, and should they feel that their rights have been violated, they would have a clear, simple, and timely mechanism for resolution.”
“The bill… would provide assurance to Canadians that if they choose to travel by air, they would be aware of their rights” (Hon. Bill Morneau, June 5, 2017)
This is part of the Government’s work to create better-informed and more confident consumers, through initiates like the Consumer Measures Committee, and to ensure that all industries are fair and transparent. It also represents a significant public investment in the air passenger experience – estimated by Transport Canada at $16.3 million. This shows just how important consumer experience has become.
What does this mean for the airline industry?
In short: more data collection, more analysis, and more reporting. Of course under Section 50(1) airlines are already required to provide Transport Canada with details like flight numbers and times, and volumes of passengers and cargo. Following the implementation of the new Transportation Information Regulations, large carriers (operating aircraft carrying 70+ passengers) will be required to make four additional monthly reports:
- The On-Time Performance Report: with data on departure and arrival times, delays, and cancellations, collected on a per-flight basis with an estimated 35 separate data elements per flight
- The Denied Boarding Report: concerning the rationale and numbers of passengers denied boarding, with an anticipated eight data elements per flight segment.
- The Lost / Damaged Baggage Report: with total affected articles, also with an anticipated eight data elements per flight segment
- The Complaints Report: focusing on complaints related Air Passenger Protection Regulations, including child seating, the transportation of musical instruments, and the timely provision of information to passengers, with data aggregated by flight segment and again with an estimated eight data elements per segment
By contrast, small air carriers will be required to submit two new quarterly reports:
- The Flight Performance / Denied Boarding Report: including an estimated 20 unique data elements per flight segment over the reporting period
- The Lost / Damaged Baggage Report: including around six data elements per destination served
“By 2028, large air carriers will submit an estimated 55 million unique data elements to Transport Canada each year.”
This adds up to a ton of data. Transport Canada estimates that large air carriers will submit around 40 million unique data elements in the first year following the amendment. By 2028, this is predicted to rise to 55 million. Small carriers are “expected to submit around 11,500 data elements in the first year of the proposed amendments coming into force, increasing to 14,000 data elements in 2028.”
The Government is aware that amassing all this data will mean time and money for airlines. For large carriers, estimated annual costs include: $25,700 for set-up, $43,600 for data collection, and $20,700 for submission, which includes compiling, reviewing, approving and submitting reports to Transport Canada. For small carriers, the expected annual costs include $2,000 for set-up, $16,000 for data collection, and $8,000 for submission. Together this means an average annual spend of $90,000 for large carriers and $26,000 for small carriers.
“New data reporting regulations are expected to cost around $90,000 each year for large carriers and $26,000 for small carriers.”
Gearing up for the changes
As they wait for the final Transportation Information Regulations to be released, many airlines are gearing up to organize new volumes of information and provide timely insights on customer experience to Transport Canada.
Airlines need new tools to approach vast quantities of structured and unstructured data from a range of sources. They need to think big about Big Data and consider how technology can assist in the collection, organization, and analysis of data, including customer feedback. Not only will this help comply with the government’s new regulatory framework, but also, listening to the voice of the customer will benefit airlines in other ways. By identifying areas of consumer complaints, companies can improve the customer experience, increase transparency, and improve the bottom line.
The projected cost to these new regulations could be cut in half
Not only this, what if we told you that the projected cost to these new regulations could be cut in half and then some? The projected annual costs to airlines is based on estimated administrative costs which includes preparing, reviewing, and submitting reports. Transport Canada estimates, for example, that the monthly On-Time Performance Report will be completed in 20 hours: 15 hours for a data scientist to compile and prepare the report (at $38.08/hour) and 5 hours for a senior manager to review and approve it (at $50.17/hour). At these rates, the report will cost just over $800.
With smart analytic tools, data collection and compilation can be shortened to minutes, leaving the data scientist with the task of drafting the report, which probably takes a couple of hours. It then goes swiftly for approval, cutting the total cost of the report to just over $300. These numbers may be small by they add up with four reports due every month ad infinitum.
Smart data tools, like Semeon, are the way of the future. Semeon is an AI-powered analytics tool that collects raw data – from a range of sources and formats – rapidly classifies the information along different parameters, and provides interpretation of its meaning. Its speed and precision means that organizations can create detailed reports in a snap and tune into the voice of the customer at each stage of their journey to remedy their pain points.
Are you ready to see what it can do? Get in touch for an air industry focused demo.