Air Canada to bar carry-on bags for lowest-fare customers

Air Canada plans to bar carry-on bags and impose a seat selection fee for its lowest-fare customers in the new year.

Starting Jan. 3, the country’s largest airline says passengers who opt for its basic fare on trips within North America and to sun destinations will have to check any duffel bags, rolling suitcases and large backpacks for a fee — $35 for the first, $50 for the second.

A small personal item such as a purse or laptop bag will be allowed on board for free, as will strollers, mobility aids and medical devices.

The airline also said that as of Jan. 21 lower-tier customers will have to pay if they want to change the seat assigned to them at check-in — a policy it had suspended just two days after implementation earlier this year amid backlash from travellers.

The moves mark a shift toward a budget carrier-style offering from Canada’s flagship airline, which along with rivals has relied increasingly on ancillary fees for formerly bundled services that range from checked bags to on-board snacks and Wi-Fi access.

Air Canada says the changes align its fare structure with similar ticket options from other Canadian carriers and “better distinguish its fare brands.”

In June, WestJet rolled out its “UltraBasic” fare. The ticket tier allows no more than a personal item on board — stored under the seat — and charges a fee for seat selection, including after check-in, whether online or in-person. Discount carrier Flair Airlines touts similar options.

No-frills fares carry growing appeal for big airlines seeking to capture cost-conscious travellers as budgets tighten after inflation and interest rate hikes.

“They’re competing with these low-cost carriers on various routes,” said Richard Vanderlubbe, founder of Hamilton, Ont.-based travel agency Tripcentral.ca. “This is what wins in the price-sensitive area of the market.”

Criticism of spartan ticket offerings is “easy,” Vanderlubbe said, but the fare tiers — up to seven at Air Canada — give travellers choice. U.S. carriers such as United Airlines, Delta Air Lines and American Airlines have similar categories, though American and Delta still allow basic economy travellers to bring a bag onto the plane at no cost.

“It’s a market solution to kind of an ugly problem,” Vanderlubbe said.

“If the overhead bins are stocked because people are avoiding baggage fees, why shouldn’t the person at the bare-bones fare be the one that pays more?”

He added that customers need to be aware that what they see as the lowest fare on a price comparison search may not wind up being the cheapest option once the fees are tallied.

“It’s not transparent until you’ve gotten a certain depth into the booking: ‘Oh, here’s the seat selection fee. Oh, here’s the baggage fee. Oh, here’s the carry-on fee.’ And watch out if you don’t check-in online, there’s a massive penalty if you don’t,” Vanderlubbe said.

“It’s kind of drip, drip, drip, drip. And it works,” he said, calling the trend “troublesome.”

Transport Minister Anita Anand agreed.

“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. They rightly expect excellent service, not extra fees,” she said Wednesday in a social media post on X, formerly known as Twitter.

Air Canada noted that basic fare passengers who arrive at the boarding gate with ineligible bags will be charged $65 per item to check them.

It also announced it would allow customers on its “comfort economy” fare — the middle of the seven tiers — to check two bags for free starting Jan. 3, rather than one.