Consumer affairs minister seeks elimination of fuel surcharge

Walter Noel, Minister of Government Services and Lands and minister responsible for consumer affairs, has written federal transportation minister David Collenette expressing his concerns about the fuel surcharge currently being imposed by Air Canada.

Minister Noel is seeking Mr. Collenette�s support for elimination of the fee.

In his letter, Minister Noel said:

While I am aware of the recent decrease in the domestic fuel surcharge by Air Canada, the presence of any surcharge at this point in time is not justifiable. The price of crude oil, and consequently jet fuel, has decreased dramatically since May 31of this year when the surcharge was imposed, in the range of 35 per cent. At a time when other transportation companies in the country have responded to falling energy prices by eliminating their fuel surcharges, Air Canada continues to levy this cost on consumers. It is particularly notable that WestJet Airlines, Canada�s most profitable airline, has never imposed a fuel surcharge.

I recognize that Air Canada introduced this surcharge six months ago during a time of inflated oil prices in order to alleviate its financial difficulties. However, the conditions under which the surcharge was placed really no longer exist and the decreasing price of jet fuel has therefore resulted in all airlines benefiting from that reduced cost.

With over 80 per cent of the Canadian market and a virtual monopoly in some regions, Air Canada is the dominant airline. Therefore, employing a surcharge when its much smaller competitors are not doing so amounts to an inordinate expense on the traveling public.

Minister Noel asked the federal government to take immediate action to have the surcharge eliminated.

Media contact: Rick Callahan, Communications, (709) 729-4860.

2001 11 26                           4:40 p.m.