Ottawa unhappy with Air Canada’s fee adjustments; travel advisors sound off

If there’s one person who isn’t pleased with Air Canada’s plan to charge carry-on fees for some passengers, it’s Canada’s Transport Minister.

Speaking to CTV’s Power Play on Wednesday (Dec. 4), Transport Minister Anita Anand said she’s “not very happy” about Air Canada adjusting its fees, a change that was announced earlier that same day.

“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 host Vassy Kapelos.

As PAX previously reported, starting Jan. 3, 2025, Air Canada passengers buying basic fare tickets for North American and sun destinations will be required to pay a carry-on fee of $35 for the first bag and $50 for the second.

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

The airline said this policy will apply to larger items, such as roller-board or duffel bags, and even large backpacks.

As well, customers who arrive at their boarding gate with ineligible carry-on items will be required to check this baggage for a $65 fee for each item.

Small personal items, like a purse or computer bag, however, will still be allowed on board for free. Basic fare passengers will also be charged for seat selection change at check-in, starting on Jan. 21.

Ottawa to meet with airlines

Minister Anita Anand said she is calling Canadian airline CEOs to a meeting in mid-December to discuss the topic of fees.

In a statement, Air Canada said the new charges are “not new in the Canadian industry and is merely our competitive response,” adding the airline “will be pleased to explain this to the government if desired.”

And that’s just it – charging for carry-on bags isn’t a new idea. In June, WestJet unveiled its "UltraBasic" ticket tier that does away with a free carry-on luggage and charges a fee for seat selection, including after check-in, whether online or in-person.

Sunwing, which belongs to the WestJet Group, has been charging fees for carry-ons for a while now, and low-cost carrier Flair Airlines has a similar policy.

Speaking to CTV, Anand recognized that extra fees are a business decision, but she’s nonetheless “extremely disappointed.”

“This is not acceptable at a time when Canadians’ pocketbooks are hurting and when they've been saving for their travels,” Anand told the outlet.

It sounds like Anand will give Canada’s airlines a stern talking to at that meeting. She said she “will deal with all of them in one room at one time.”

Anand’s criticism of Air Canada is unique given how Ottawa purchased $500 million of the airline’s shares – representing a six per cent equity – during the COVID-19 pandemic as part of nearly $6 billion-dollar bailout package.

In her interview with CTV, Anand acknowledged the federal government’s “specific relationship” with Air Canada due to that loan.

Asked by Kapelos whether she will use the government’s equity in Air Canada to leverage change, Anand said she’s “examining the particular legal relationship right now” and will have more to say “in the days ahead.”

Travel advisors sound off

PAX reached out to several Canadian travel advisors to get their take on the situation.

Ontario-based Nancy Wilson of Leisure Life Holiday has two perspectives on the matter.

“Number one, I never sell basic fares, so this isn’t going to have a huge impact on my business,” Wilson told PAX. “Generally speaking, if my clients are asking for basic fares, I don’t book it, and I have them book it themselves. I also state they must then purchase cancellation insurance. Usually, once I’ve explained my reasoning, they agree to doing the next higher fare type.”

At the same time, Wilson is also “somewhat” happy with Air Canada’s decision.

“Quite honestly, I am getting tired of getting on a plane where it takes an extra 30 minutes on average, and usually results in a delayed departure, because everybody’s trying to fly with carry-on and there’s not enough room to store it,” she said.

Wilson said the new fees will be “difficult for a lot of people who like to fly with carry-on only.”

“But something needs to be done with how many people are bringing carry-on baggage only,” Wilson said. “I somewhat expected that it was a matter of time before there would be fees for carry-on bags.”

Shalene Dudley of Latitude Concierge Travels Ltd., also based in Ontario, echoed that pount: “The only surprise in this situation is that it took this long for them to add the fee and follow other airlines," she said. 

“Just another reason to book with a travel advisor!”

Brenda Slater of Beyond the Beach also tries to avoid selling Basic (and even Standard) fares with Air Canada.

“Generally, by the time you add baggage fees and seat selection fees, along with the cancellation insurance coverage, you may as well book the Eco-flex fare,” Slater said.

“As a consumer, it must be tough sorting out who does what. Booking direct or online, and then arriving at the check-in counter only to be told you have to pay, would not be a good scene. Just another reason to book with a travel advisor!”

More space needed

Sharon Loppie of TravelBug Travel in Halifax, NS, agrees that airlines need to do something to clear up space in overhead luggage compartments.   

Travellers, including herself, often struggle when it’s time to stow items.

“I had that experience when I travelled to the Mediterranean with Air Canada in October. I had to stow my carry-on quite a ways down from where I was sitting on the plane because of all the large carry-on luggage that was stowed above,” she said.

Loppie, however, believes there’s space for a compromise, suggesting that travellers could be exempt from extra fees if they were taking shorter trips.

As far as the seat selection fees go, Loppie doesn’t think a person should have to pay for a certain seat before they travel.

“Upon check-in, travellers should be able to choose a seat from whatever is available,” she said. “If it’s available, then a person should be able to choose it on the day of travel – without a fee.”

A tough pill to swallow?

Frances Gertsch of Stewart Travel Group in P.E.I. thinks Air Canada's change brings the airline up to speed with other carriers. It also makes the fare options “easier to understand, which is helpful for travellers.”

“That said, the extra fees for basic fares could be a tough pill to swallow, especially for families trying to keep costs down,” she said. “As a travel advisor, I don’t usually recommend basic fares because of the restrictions—they work for budget travelers with flexible plans, but you really have to weigh the low price against the risks.”

For families or those requiring an assistant, Air Canada says it will keep these customers together, as per its current policy, which also prioritizes seating travelling companions together.

Gertsch called this, in addition to increasing the number of checked bags with Comfort fares, “good moves.”

“The challenge for Air Canada will be to add these costs without pushing people away, especially with travel already getting more expensive,” she said.

“Cheapest isn't always best”

Judith Coates of Wired For Travel also wasn’t surprised to see Air Canada follow the trend. 

“It's an opportunity for airlines to advertise lower fares when booking, but then get additional revenue from the passenger down the road,” Coates told PAX. “I don't have any clients who will be affected because I never book Basic fares, since they are the most restrictive. I like to educate my clients that ‘cheapest isn't always best.’”

The latest move by Air Canada only “strengthens the reality that booking with a professional travel advisor is necessary,” she said.

“We can advise on the difference in all the fare categories, and what they do and don't include,” she said.

Air Canada Vacations, meanwhile, has confirmed that Air Canada’s new baggage fees do not apply to its customers.  

Under ACV’s “Vacation Promise,” which also applies to groups, the first checked bag is free per person on any ACV vacation package that includes air, the tour operator wrote in a message to the trade.

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