Airline execs appear before parliamentary committee, defend carry-on bag fees

Airline CEOs were in the hot seat on Friday (Dec. 13) as they appeared before a parliamentary committee, defending carry-on baggage fees.

Top executives from Air Canada, WestJet, Porter and Air Transat participated in the hearing, which was called on the heels of Air Canada announcing that its basic-fare passengers will no longer be allowed to carry on luggage and must pay $35 to check one bag.

The changes allow customers who purchase the lowest-price fares to bring aboard one personal item, such as a laptop, but they will face another fee to change their seat

Michael Rousseau, Air Canada’s CEO, faced criticism for everything from the new fees to his compensation.

“I find it hard to believe a CEO can earn $12-million a year and wants to impose ancillary fees on customers,” Liberal MP Vance Badawey told Rousseau, who appeared via video link.

Angelo Iacono, a Liberal MP from Quebec, blasted the executives for benefiting from taxpayer bailouts during the pandemic and then raising fees.

“So here you are imposing all those fees on Canadians, and if you don’t remember, it was those Canadians who bailed you out when you needed financial help,” he said.

READ MORE: Air Canada to adjust Basic & Comfort fares starting January 3, 2025

Rousseau argued that Air Canada’s new fare that excludes carry-on luggage, which takes effect Jan. 3, offers flexible and more affordable options for travellers.

"Travellers tend to prioritize the lowest advertised price even if additional fees make the final cost higher, and small differences in pricing can determine whether we are considered at all," Rousseau said in his opening remarks.

The CEO also pointed out that MPs only began to scrutinize carry-on fees after Air Canada announced its decision.

"Similar fare structures at other carriers have not raised concerns from Parliament," he said.

A “competitive response”

WestJet made a similar move to Air Canada’s earlier this year with the introduction of its “UltraBasic” fare class. Porter, Flair and Sunwing (which was acquired by WestJet in 2023) also charge passengers a fee for carry-on luggage.

In a statement earlier this month, Air Canada said the new charges are “not new in the Canadian industry and is merely our competitive response.”

Transport Minister Anita Anand was among Air Canada’s loudest critics after the airline announced its fee adjustments. 

“I think they need to take a look at the persons that they are targeting with these excess fees. It is not acceptable,” the Minister told CTV’s Power Play on Dec. 4. “This is not acceptable at a time when Canadians’ pocketbooks are hurting and when they've been saving for their travels.”

"It's a choice”

WestJet’s CEO Alexis von Hoensbroech said the new fare structure, which unbundles a product, comes down to offering travellers more choices.

The CEO noted that more than a million customers have purchased tickets that don't allow passengers a carry-on bag.

"It's a choice,” von Hoensbroech told the committee. “Everyone who buys this knows [it doesn't include a carry-on bag]. This is not a surprise, this is something someone deliberately chooses.”

The executives said by offering passengers different fare choices, they are actually making travel cheaper for Canadians.

Customers who avoid carry-on bags also prevent the type of delays that occur when overhead bin space on a flight runs out, von Hoensbroech said.

Between this past August and November, WestJet has have seen a 54 per cent reduction in delay minutes and a 67 per cent reduction in flights impacted, “meaning more Canadians are getting where they want to go on time,” he said.

The cost of flying in Canada

The discussion allowed von Hoensbroech to highlight another important issue: Canada’s expensive aviation sector.

Echoing arguments he has made previously, von Hoensbroech noted how flying in Canada is among the most expensive, globally, due in part to government policies and third-party fees.

Navigation fees, security charges, airport improvement fees and other taxes and fees can add up to $99 to a ticket price, von Hoensbroech said (whereas in the U.S., similar charges add up to around $28)

“It is time for government to bring down mandatory fees and charges that passengers have to shoulder on top of their fare to a level that is more in line with other similar countries,” the CEO said.

von Hoensbroech said that in WestJet’s 28 years, the airline has “cut airfares in half.”

“Unfortunately, over the same period of time, government and third-party fees and taxes have gone up by two thirds,” he said.

He said the government needs to freeze hikes in third-party fees and charges to allow Canada’s aviation sector to compete globally.

“These sky-high fees are truly the main hurdle to competition in Canada,” he said, saying that the fees prevent millions of low-income Canadians from using air travel.

Ottawa should also cease charging rent to airports, allowing airports to reinvest these funds into infrastructure and services, he said.

Taking to his LinkedIn page over the weekend, von Hoensbroech reiterated his points, writing that the cost of air travel in Canada is “out of control.”

“While our UltraBasic fare (introduced in June) saved Canadians double digit [millions], government -controlled fees/charges/taxes have gone through the roof,” he wrote, saying that those charges are now “about triple” of what they are in the U.S.

“If Canada’s policy makers are serious about affordability, they need to a) acknowledge this fact and b) engage in a serious reform of the aviation sector.”

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