Air Canada faces backlash over new fees

Extra fees to fly Air Canada is dropping carry-on bags for some basic fare flights next year. CTV's Tyler Fleming reports.

Air Canada's decision to charge new fees on budget fares has drawn criticism from travellers, industry experts and the federal government, who argue the airline is unfairly burdening passengers with additional costs.

Starting Jan. 3, 2025, passengers flying on Air Canada's basic-economy fare within North America will be charged $35 for their first carry-on bag, with additional bags costing $50 each. Small personal items that fit under the seat, such as purses or laptop bags, will remain free.

Also, come late February, checked baggage fees will increase to $35 to $42 for the first bag and $50 to $60 for the second on domestic and select international routes.

"That sucks. The service isn't getting any better and the prices are getting pretty intense," says air passenger, Nico Arellano. "I have two children — a baby and a toddler — and we have to bring all their essentials and to pay extra for that, for families it's very unacceptable, actually."

The new policy also introduces fees for seat selection and changes for budget fares, while premium upgrades like extra legroom seats will remain available at a higher cost.

"I don't pick seat at this point. I would like to travel as economically as possible," says Kinsenge Mbaga, who's travelling from Ottawa to Fredericton. "The charges I find the most annoying are probably baggage, especially carry-on. When they're not included with the ticket, it's a real pain and I feel like that should just be basic. You should be able to have a bag or two, but that's not always the case and sometimes if it's at the gate, it will cost you more."

Transport Minister Anita Anand criticized the airline's new policies, calling them a "cash grab" that hurts Canadians who are already facing rising costs for travel.

Meanwhile, Air Canada defended its decision, saying the fees are necessary to cover rising operational and labour costs. The airline pointed out that similar fees are already in place with many global carriers, noting that passengers booking higher-tier fares, will continue to enjoy free baggage allowances.

The changes have sparked frustration among travellers, particularly those who rely on lower-cost fare options and critics argue the fees disproportionately impact budget-conscious flyers and may lead to higher overall costs when compared to slightly higher-tier fares.

"Carriers can charge whatever they want to charge. Today it's 35 bucks. Next week, it's going to be 60 bucks. The week after, it's going to be 100 bucks. Nobody's watching over these things; it's based on what the market can bear," says airline analyst John Gradek. "We're not done yet with these fees. There are other things that they can do to, kind of, you know, further nickel-and-dime passengers flying on domestic routes."

The federal government has promised to review the impact of these changes on consumers as part of its ongoing efforts to improve air passenger rights in Canada.

For now, travellers are urged to carefully review fare details to avoid unexpected charges.

"It's a shame that Air Canada has decided to join the likes of Porter and WestJet in charging people for carry-on bags for the lowest fare type and it's a sign of the times that Air Canada is afraid of losing market shares and wants to basically maximize its revenue by having these cheap airfares with a whole bunch of additional revenues coming in," says Gradek. "It's not a stretch to think that the government, within its regulation, can start to provide oversight and management of the way in which these airlines are putting these fees into the marketplace."