Air Canada now charging $25 for first checked bag
bootlegga @ Thu Sep 18, 2014 9:51 am
$1:
MONTREAL -- Air Canada has joined rival WestJet Airlines in charging a $25 fee for your first checked bag on domestic flights.
The fee applies to passengers booking the airline's lowest economy class Tango fares, as of Thursday for flights as of Nov. 2.
The Montreal-based airline (TSX:AC.B) has charged for a traveller's first checked bag on U.S. routes since 2011 and will now add a fee for flights between Canada and the Caribbean and Mexico.
"We're matching the market," chief financial officer Michael Rousseau told a CIBC investor conference.
Earlier this week, Calgary-based WestJet (TSX:WJA) announced a fee for a traveller's first checked bag that ranges between $25 and $29.50 depending on provincial taxes, for flights within Canada and to the United States, but not to Mexico, the Caribbean, Central America and Europe.
Industry observers had expected Air Canada to add the fee, which it says will affect about 20 per cent of passengers on domestic flights.
Air Canada's new bag fee means that nearly all North American airlines aside from Southwest and Jet Blue charge a first checked baggage fee.
"It's what the market is bearing at this point in time," Rousseau added.
Analyst Chris Murray of AltaCorp Capital estimates the fee will affect 40.7 million passengers in 2015 and add about $50 million in pre-tax operating earnings (EBITDAR) for Air Canada.
Meanwhile, Canaccord Genuity analyst David Tyerman estimated the bag fee will generate $46 million in additional revenue and $23 million in profits at Air Canada assuming no loss in the number of checked bags or change in base ticket fares.
"Overall, we would expect net benefits from the introduction of first-bag fees, although the degree of upside is debatable," he wrote in a report after estimating earlier this week that it could raise $65 million in new revenue.
"There is definitely the potential for base ticket price reductions, as WestJet has talked about reducing ticket prices this week as part of its first-bag fee initiative."
Air Canada's new fee doesn't apply to higher economy class and business class fares, customers purchasing Air Canada Vacations packages or Altitude prestige, elite and super elite members as well as Star Alliance silver and gold members.
Business class customers can check two bags at no cost, while military personnel receive up to three free checked bags.
WestJet chief financial officer Vito Culmone later told the investor conference that the airline expects the new fee could reduce checked bags by 20 to 30 per cent, based on experience of other airlines.
The fee applies to passengers booking the airline's lowest economy class Tango fares, as of Thursday for flights as of Nov. 2.
The Montreal-based airline (TSX:AC.B) has charged for a traveller's first checked bag on U.S. routes since 2011 and will now add a fee for flights between Canada and the Caribbean and Mexico.
"We're matching the market," chief financial officer Michael Rousseau told a CIBC investor conference.
Earlier this week, Calgary-based WestJet (TSX:WJA) announced a fee for a traveller's first checked bag that ranges between $25 and $29.50 depending on provincial taxes, for flights within Canada and to the United States, but not to Mexico, the Caribbean, Central America and Europe.
Industry observers had expected Air Canada to add the fee, which it says will affect about 20 per cent of passengers on domestic flights.
Air Canada's new bag fee means that nearly all North American airlines aside from Southwest and Jet Blue charge a first checked baggage fee.
"It's what the market is bearing at this point in time," Rousseau added.
Analyst Chris Murray of AltaCorp Capital estimates the fee will affect 40.7 million passengers in 2015 and add about $50 million in pre-tax operating earnings (EBITDAR) for Air Canada.
Meanwhile, Canaccord Genuity analyst David Tyerman estimated the bag fee will generate $46 million in additional revenue and $23 million in profits at Air Canada assuming no loss in the number of checked bags or change in base ticket fares.
"Overall, we would expect net benefits from the introduction of first-bag fees, although the degree of upside is debatable," he wrote in a report after estimating earlier this week that it could raise $65 million in new revenue.
"There is definitely the potential for base ticket price reductions, as WestJet has talked about reducing ticket prices this week as part of its first-bag fee initiative."
Air Canada's new fee doesn't apply to higher economy class and business class fares, customers purchasing Air Canada Vacations packages or Altitude prestige, elite and super elite members as well as Star Alliance silver and gold members.
Business class customers can check two bags at no cost, while military personnel receive up to three free checked bags.
WestJet chief financial officer Vito Culmone later told the investor conference that the airline expects the new fee could reduce checked bags by 20 to 30 per cent, based on experience of other airlines.
http://www.ctvnews.ca/business/air-cana ... -1.2012701
Thanks for nothing Westjet!
![[rtfm]](./images/smilies/smilie_rtfm.gif "RTFM")
PublicAnimalNo9 @ Thu Sep 18, 2014 10:16 am
$1:
There is definitely the potential for base ticket price reductions, as WestJet has talked about reducing ticket prices this week as part of its first-bag fee initiative."
Not sure I understand the logic in that. Not that it matters to me, I wouldn't fly coach if the flight was free.
Zipperfish @ Thu Sep 18, 2014 10:18 am
They just seem absolutely determined to make flying as miserable an experience as possible.
Jonny_C @ Thu Sep 18, 2014 5:18 pm
Hell, I've had to pay $15-$20 extra just to be able to book seats so my wife and I are guaranteed to be able to sit side by side on a trip. And that is for every leg of the flight!
I'll bet that luggage surcharge gets charged twice on a return trip.
Jabberwalker @ Thu Sep 18, 2014 6:07 pm
Hey, what an original idea. Those AC marketing types are pretty sharp pencils.
jj2424 @ Thu Sep 18, 2014 7:59 pm
bootlegga bootlegga:
$1:
MONTREAL -- Air Canada has joined rival WestJet Airlines in charging a $25 fee for your first checked bag on domestic flights.
The fee applies to passengers booking the airline's lowest economy class Tango fares, as of Thursday for flights as of Nov. 2.
The Montreal-based airline (TSX:AC.B) has charged for a traveller's first checked bag on U.S. routes since 2011 and will now add a fee for flights between Canada and the Caribbean and Mexico.
"We're matching the market," chief financial officer Michael Rousseau told a CIBC investor conference.
Earlier this week, Calgary-based WestJet (TSX:WJA) announced a fee for a traveller's first checked bag that ranges between $25 and $29.50 depending on provincial taxes, for flights within Canada and to the United States, but not to Mexico, the Caribbean, Central America and Europe.
Industry observers had expected Air Canada to add the fee, which it says will affect about 20 per cent of passengers on domestic flights.
Air Canada's new bag fee means that nearly all North American airlines aside from Southwest and Jet Blue charge a first checked baggage fee.
"It's what the market is bearing at this point in time," Rousseau added.
Analyst Chris Murray of AltaCorp Capital estimates the fee will affect 40.7 million passengers in 2015 and add about $50 million in pre-tax operating earnings (EBITDAR) for Air Canada.
Meanwhile, Canaccord Genuity analyst David Tyerman estimated the bag fee will generate $46 million in additional revenue and $23 million in profits at Air Canada assuming no loss in the number of checked bags or change in base ticket fares.
"Overall, we would expect net benefits from the introduction of first-bag fees, although the degree of upside is debatable," he wrote in a report after estimating earlier this week that it could raise $65 million in new revenue.
"There is definitely the potential for base ticket price reductions, as WestJet has talked about reducing ticket prices this week as part of its first-bag fee initiative."
Air Canada's new fee doesn't apply to higher economy class and business class fares, customers purchasing Air Canada Vacations packages or Altitude prestige, elite and super elite members as well as Star Alliance silver and gold members.
Business class customers can check two bags at no cost, while military personnel receive up to three free checked bags.
WestJet chief financial officer Vito Culmone later told the investor conference that the airline expects the new fee could reduce checked bags by 20 to 30 per cent, based on experience of other airlines.
The fee applies to passengers booking the airline's lowest economy class Tango fares, as of Thursday for flights as of Nov. 2.
The Montreal-based airline (TSX:AC.B) has charged for a traveller's first checked bag on U.S. routes since 2011 and will now add a fee for flights between Canada and the Caribbean and Mexico.
"We're matching the market," chief financial officer Michael Rousseau told a CIBC investor conference.
Earlier this week, Calgary-based WestJet (TSX:WJA) announced a fee for a traveller's first checked bag that ranges between $25 and $29.50 depending on provincial taxes, for flights within Canada and to the United States, but not to Mexico, the Caribbean, Central America and Europe.
Industry observers had expected Air Canada to add the fee, which it says will affect about 20 per cent of passengers on domestic flights.
Air Canada's new bag fee means that nearly all North American airlines aside from Southwest and Jet Blue charge a first checked baggage fee.
"It's what the market is bearing at this point in time," Rousseau added.
Analyst Chris Murray of AltaCorp Capital estimates the fee will affect 40.7 million passengers in 2015 and add about $50 million in pre-tax operating earnings (EBITDAR) for Air Canada.
Meanwhile, Canaccord Genuity analyst David Tyerman estimated the bag fee will generate $46 million in additional revenue and $23 million in profits at Air Canada assuming no loss in the number of checked bags or change in base ticket fares.
"Overall, we would expect net benefits from the introduction of first-bag fees, although the degree of upside is debatable," he wrote in a report after estimating earlier this week that it could raise $65 million in new revenue.
"There is definitely the potential for base ticket price reductions, as WestJet has talked about reducing ticket prices this week as part of its first-bag fee initiative."
Air Canada's new fee doesn't apply to higher economy class and business class fares, customers purchasing Air Canada Vacations packages or Altitude prestige, elite and super elite members as well as Star Alliance silver and gold members.
Business class customers can check two bags at no cost, while military personnel receive up to three free checked bags.
WestJet chief financial officer Vito Culmone later told the investor conference that the airline expects the new fee could reduce checked bags by 20 to 30 per cent, based on experience of other airlines.
http://www.ctvnews.ca/business/air-cana ... -1.2012701
Thanks for nothing Westjet!
yeah they invented baggage fees. Fly much?"“Twenty-five per cent of our guests never check a bag, but they were paying for the shipping fees of luggage that are on their flights. Our thinking is, how do we keep the fare low for passengers?”"
http://www.calgaryherald.com/news/metro ... story.html
I agree 100%. I don't want to pay for someone else's baggage. I fly 6 times a year minimum and only check a bag once a year. I'll gladly pay 25 bucks at that time.
Jonny_C @ Thu Sep 18, 2014 8:24 pm
jj2424 jj2424:
"“Twenty-five per cent of our guests never check a bag, but they were paying for the shipping fees of luggage that are on their flights. Our thinking is, how do we keep the fare low for passengers?”"
I agree 100%. I don't want to pay for someone else's baggage. I fly 6 times a year minimum and only check a bag once a year. I'll gladly pay 25 bucks at that time.
I agree 100%. I don't want to pay for someone else's baggage. I fly 6 times a year minimum and only check a bag once a year. I'll gladly pay 25 bucks at that time.
You're assuming that air fares will be lower for everyone as a result of some passengers being charged extra for baggage. It won't necessarily play out that way. More likely the airlines will just keep the extra baggage fees as "gravy", although they might make a token initial effort to make it look like there are savings involved.
PublicAnimalNo9 @ Thu Sep 18, 2014 8:46 pm
Jonny_C Jonny_C:
jj2424 jj2424:
"“Twenty-five per cent of our guests never check a bag, but they were paying for the shipping fees of luggage that are on their flights. Our thinking is, how do we keep the fare low for passengers?”"
I agree 100%. I don't want to pay for someone else's baggage. I fly 6 times a year minimum and only check a bag once a year. I'll gladly pay 25 bucks at that time.
I agree 100%. I don't want to pay for someone else's baggage. I fly 6 times a year minimum and only check a bag once a year. I'll gladly pay 25 bucks at that time.
You're assuming that air fares will be lower for everyone as a result of some passengers being charged extra for baggage. It won't necessarily play out that way. More likely the airlines will just keep the extra baggage fees as "gravy", although they might make a token initial effort to make it look like there are savings involved.
Exactly. If the new charge doesn't negatively affect passenger numbers, we definitely won't be seeing the ticket prices go down.
OnTheIce @ Fri Sep 19, 2014 6:11 am
Jonny_C Jonny_C:
jj2424 jj2424:
"“Twenty-five per cent of our guests never check a bag, but they were paying for the shipping fees of luggage that are on their flights. Our thinking is, how do we keep the fare low for passengers?”"
I agree 100%. I don't want to pay for someone else's baggage. I fly 6 times a year minimum and only check a bag once a year. I'll gladly pay 25 bucks at that time.
I agree 100%. I don't want to pay for someone else's baggage. I fly 6 times a year minimum and only check a bag once a year. I'll gladly pay 25 bucks at that time.
You're assuming that air fares will be lower for everyone as a result of some passengers being charged extra for baggage. It won't necessarily play out that way. More likely the airlines will just keep the extra baggage fees as "gravy", although they might make a token initial effort to make it look like there are savings involved.
It definitely won't play out that way.
Prices will remain the same and they'll just be higher for those with bags.
Regina @ Fri Sep 19, 2014 6:21 am
The other kick in the nuts is when and if, you can ever use your Airmiles or Aeroplan points, the luggage charge is an extra fee you need to pay.
jj2424 @ Fri Sep 19, 2014 6:40 am
Jonny_C Jonny_C:
jj2424 jj2424:
"“Twenty-five per cent of our guests never check a bag, but they were paying for the shipping fees of luggage that are on their flights. Our thinking is, how do we keep the fare low for passengers?”"
I agree 100%. I don't want to pay for someone else's baggage. I fly 6 times a year minimum and only check a bag once a year. I'll gladly pay 25 bucks at that time.
I agree 100%. I don't want to pay for someone else's baggage. I fly 6 times a year minimum and only check a bag once a year. I'll gladly pay 25 bucks at that time.
You're assuming that air fares will be lower for everyone as a result of some passengers being charged extra for baggage. It won't necessarily play out that way. More likely the airlines will just keep the extra baggage fees as "gravy", although they might make a token initial effort to make it look like there are savings involved.
Anyone who searches for plane tickets regularly knows prices fluctuate daily on the same flights, long term comparison is the only way of knowing. I've been flying the same destination for 5 years , prices have not gone up. Charging for bags is a way of preventing it from going up. In fact US Airways who has charged for bags for years beats Westjet 9 times out of 10 to the same destination flying the same day but only a few hours apart.
jj2424 @ Fri Sep 19, 2014 6:42 am
PublicAnimalNo9 PublicAnimalNo9:
Jonny_C Jonny_C:
jj2424 jj2424:
"“Twenty-five per cent of our guests never check a bag, but they were paying for the shipping fees of luggage that are on their flights. Our thinking is, how do we keep the fare low for passengers?”"
I agree 100%. I don't want to pay for someone else's baggage. I fly 6 times a year minimum and only check a bag once a year. I'll gladly pay 25 bucks at that time.
I agree 100%. I don't want to pay for someone else's baggage. I fly 6 times a year minimum and only check a bag once a year. I'll gladly pay 25 bucks at that time.
You're assuming that air fares will be lower for everyone as a result of some passengers being charged extra for baggage. It won't necessarily play out that way. More likely the airlines will just keep the extra baggage fees as "gravy", although they might make a token initial effort to make it look like there are savings involved.
Exactly. If the new charge doesn't negatively affect passenger numbers, we definitely won't be seeing the ticket prices go down.
Why would it affect passenger numbers? Just about every airline in the world charges for bags. What are you going to do ? Drive 24 hrs when you can fly it in 3?
bootlegga @ Fri Sep 19, 2014 8:24 am
jj2424 jj2424:
bootlegga bootlegga:
Thanks for nothing Westjet!
yeah they invented baggage fees. Fly much?"“Twenty-five per cent of our guests never check a bag, but they were paying for the shipping fees of luggage that are on their flights. Our thinking is, how do we keep the fare low for passengers?”"
http://www.calgaryherald.com/news/metro ... story.html
I agree 100%. I don't want to pay for someone else's baggage. I fly 6 times a year minimum and only check a bag once a year. I'll gladly pay 25 bucks at that time.
You would be right if WestJet was still a low-cost airline, but it isn't - Westjet's fares aren't cheap these days - they are often comparable to Air Canada's.
$1:
“Even WestJet has moved away from the low-cost strategy that characterized its operations in its early days,” Audet said.
http://globalnews.ca/news/1568458/brigh ... ir-travel/
bootlegga @ Fri Sep 19, 2014 8:25 am
jj2424 jj2424:
PublicAnimalNo9 PublicAnimalNo9:
Exactly. If the new charge doesn't negatively affect passenger numbers, we definitely won't be seeing the ticket prices go down.
Why would it affect passenger numbers? Just about every airline in the world charges for bags. What are you going to do ? Drive 24 hrs when you can fly it in 3?
Fly much?
There are plenty of other airlines to fly if Westjet's fees and fares aren't competitive.
Zipperfish @ Fri Sep 19, 2014 8:42 am
Jonny_C Jonny_C:
Hell, I've had to pay $15-$20 extra just to be able to book seats so my wife and I are guaranteed to be able to sit side by side on a trip. And that is for every leg of the flight!
I'll bet that luggage surcharge gets charged twice on a return trip.
I'll bet that luggage surcharge gets charged twice on a return trip.
Hey, long time no see--good to hear from you!