Air Canada has joined airlines like WestJet in charging extra fees for previously bundled services like carry-on luggage for its lowest-priced ticket tier.
Beginning in the new year, certain Basic fare passengers will be dinged for showing up to the airport with carry-on bags larger than a small personal item, like a purse or computer bag.
“The adjustments we have made to certain (sic) of our fares is a commercial decision that we took only after our main competitors in Canada enacted similar policies quite some time ago,” a spokesperson for Air Canada told the Star over email.
Here’s a look at how the airline’s new pricing plan compares to other options across Canada, and what it means for your travels.
Air Canada’s new carry-on fees
Passengers who bought a Basic fare ticket on or after Jan. 3, 2025 to North America or sun destinations will have to check their duffel bags, large backpacks or small suitcases before security. Customers must pay $35 for their first bag and $50 for their second.
Those who arrive at the gate with an ineligible carry-on item will have to check their luggage for $65 per item.
“Mobility aids, medical devices, and child strollers are exempt from carry-on charges for all customers,” the airline noted in a release. Status members, Star Alliance Gold and Aeroplan premium credit cardholders will also be entitled to one carry-on bag, alongside their other benefits.
Beginning Jan. 21, 2025, Basic fare customers who want to change their seat from the one assigned to them at check-in will also have to pay an extra fee — a policy the airline previously suspended earlier this year amid backlash.
“It should be noted that Air Canada offers customers a wide range of fares with various attributes, including allowances for carry-on baggage should customers wish to have this option,” the airline’s spokesperson added. Of Air Canada’s seven fare tiers, Basic is the cheapest.
Some experts note that by offering so-called à la carte options, passengers may feel they have more ability to decide the service they’re engaging in.
“And so because of that, it tends to reduce customer complaints because they feel like they have more control over what they’re buying,” Louis Gialloreto, an associate professor of marketing at McGill University, told the Star. “So psychologically, it tends to result in fewer complaints.”
Air Canada’s new changes are facing federal scrutiny
The pricing changes have caught the eye of federal transport minister Anita Anand, who condemned the move on social media.
“I was just made aware of a decision by Air Canada to introduce new carry-on baggage fees. I am extremely concerned. Canadians work hard and save up to travel,” Anand posted to X. “They rightly expect excellent service, not extra fees.”
Anand later told CTV she will be calling Canadian airline CEOs to a meeting later this month. Air Canada’s spokesperson noted: “This is not new in the Canadian industry and is merely our competitive response, and we will be pleased to explain this to the government if desired”
In 2023, Air Canada took in over $2.5 billion in ancillary revenue — extra fees for services like onboard wifi and meals — according to a recent report by airline consulting firm IdeaWorksCompany. That’s up from nearly $2 billion the year before.
But according to Gialloreto, the extra fees collected for carry-on bags in the new year likely won’t make much of a difference to this revenue stream, as relatively few people will go for the lowest fare tier and also check their backpacks.
The airline’s update also arrived on the back of a U.S. Senate subcommittee report Tuesday that found U.S. airlines Spirit and Frontier paid gate agents to catch passengers not following bag policies, with workers reportedly earning up to $10 for every oversized bag customers were forced to check at the gate.
Air Canada asserted it had no such incentive program in place for the coming changes.
WestJet already introduced a similar plan
In June, WestJet replaced its Basic ticket tier with a new, “Ultrabasic” fare category that did away with its once-free carry-on bag allowance and other perks. Like Air Canada, Ultrabasic is the cheapest of its seven fare classes.
Unlike Air Canada, Ultrabasic passengers are not allowed a carry-on bag at all unless flying transpacific and transatlantic routes, and must instead pay to check their luggage. However, travellers are allowed a small, personal item to store under the seat.
It also costs Ultrabasic customers more to check in their bags. Customers who prepay are charged $45 to $54 for their first bag and $65 to $77 for their second; the prices rise further if bags are checked in at the airport.
Before 2014, the cost to check one bag was included in the price of a Canadian airline ticket. That year, WestJet announced it would start charging for customers’ first checked bag, and Air Canada followed suit soon after for certain customers.
Ultrabasic customers will also be given a pre-assigned seat at the back of the aircraft they must pay to change, and will be last to board the plane.
“With the introduction of UltraBasic, our goal is to keep fares as low as possible while allowing our guests choice and the opportunity to tailor a travel experience that meets their individual needs,” a spokesperson for WestJet told the Star, adding that more than 100,000 UltraBasic tickets sold in the first week of launch.
“Since the introduction of our UltraBasic fare in June, guests have benefitted from more affordable airfares across all Economy fare classes, including those that include carry-on baggage,” they said.
How do other low-priced tickets compare?
Porter Airlines’ Basic tier, the cheapest of its five fare categories, also does not include carry-on baggage, although passengers are allowed one small, personal item. It will also cost an additional fee to change their pre-assigned seat.
For those travelling within North America or to sun destinations, it costs $40 to $51.75 for a first checked bag, $55 to $63.25 for a second and $100 to $115 for any subsequent luggage.
Air Transat includes a complimentary carry-on bag for all its fare tiers, including its cheapest Eco Budget option. This option costs extra to change one’s seat, and offers no option to cancel or change the ticket.
Meanwhile, Flair Airlines’ standard fare has always charged for a carry-on bag, which costs passengers $29 to $74 at the time of their online booking, $49 to $84 if it’s done at check-in and up to $94 if bags are declared at the airport.
Canadian airlines are only following a global trend, noted Marc-David Seidel, an associate professor with the University of British Columbia’s Sauder School of Business. Unbundling services can be traced back to the 1970’s, after deregulation of the U.S. airline industry prompted carriers like Southwest Airlines to embrace charging extra for previously included services.
The popularity of such a model “will always ebb and flow as some consumers prefer the ease and simplicity of ‘all inclusive’ pricing while others prefer to ‘only pay for what I need,’” he said over email.
Which plan is cheapest?
Assuming you don’t plan on taking a carry-on bag, the pricing depends on where you’re hoping to go and when.
For example, a one-way ticket from Toronto to Calgary on Jan. 6 starts at $130 for Air Canada’s Basic fare, $141 for WestJet Ultrabasic, $119 for Flair, $106 for Porter Basic and $169 for Air Transat’s Eco Budget options.
Meanwhile, a similar trip from Toronto to Vancouver on the same date will cost at least $317 for Air Canada, $223 for Westjet, $209 for Flair, $262 for Porter and $281 for Air Transat.
If you do plan on taking at least one carry-on, however, you’re often better off upgrading to the next fare tier.
Going up one fare tier of the same Toronto-Vancouver flight will cost: $357 for Air Canada, $368 for WestJet, $308 for Flair’s Basic Bundle, $299 for Porter and $288 for Air Transat — meaning, in this case, it’s actually cheaper to upgrade your Porter ticket than checking in your backpack.
Ever since Canada deregulated its airline industry with the National Transportation Act in 1987, airlines have actually dropped in profitability, Gialloreto noted, leading to the bankruptcy of major carriers including Air Canada.
“Having emerged from that period of deregulation, they’re now trying to do everything they can to make sure they’re being financially viable,” he said. “So I understand why they’re doing what they’re doing.”
