Air Canada said it will start charging passengers $25 for their first checked bag, days after rival WestJet Airlines Ltd. introduced a similar measure.
Air Canada says it will begin charging $25 for a first checked bag on domestic flights within Canada. Passengers flying to and from the Caribbean and Mexico will also be charged $25 for their first checked bag. The charge will affect people flying on the lowest economy class ‘Tango’ fare.
The charge is expected to affect an estimated one in five Air Canada passengers on domestic flights within Canada, representing approximately 5 per cent of the airline’s customers system-wide, Air Canada said.
Air Canada had charged some economy passengers for their first checked bag on flights between Canada and the United States since 2011, but there was no similar fee on domestic flights.
Earlier this week, Air Canada’s competition, WestJet, announced a first-checked bag fee ranging from $25 t0 $29, varying according to provincial taxes, for flights within Canada and to the United States. That fee does not apply on flights to Mexico, the Caribbean, Central America and Europe.
The new charges put in place by Canada’s two largest airlines this week will give Southwest Airlines Co. an advantage should the large U.S. carrier decide to enter the Canadian market.
Southwest has a policy that customers can check their first two bags free of charge. Senior executives insisted last week that that policy will remain in place – in part because the revenue lost because of customers defecting to other airlines would outweigh the revenue gained from the fees.
US carriers that fly into Canada have charged the same first-bag fee for years, experts note, something WestJet and Air Canada had resisted introducing until now.
Baggage fees generated $3.35-billion (U.S.) for U.S. airlines last year.