Here's how much more Canadians will pay as Air Canada, WestJet increase checked baggage fee (2024)

On Wednesday, Air Canada announced that they were making changes to their checked bag policy, following in the footsteps of other airlines that made similar changes.

In a statement to National Post, Air Canada said that their airfares are determined by many factors and, as a result, prices are dynamic and change frequently. Air Canada also pointed out that, in January, airfares fell 14 per cent as demand for air travel slowed and competition between carriers increased.

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“What’s changing is that the rate of growth and demand is going to slow down now,” said Louis Gialloreto, associate professor of marketing and the executive director of McGill University’s Executive Institute. “A lot of the big growth years (post-COVID) are behind us… what’s going to happen eventually is there’s going to be plenty of capacity to chase a demand that is not growing as quickly. That usually leads to prices going down.”

The change comes two weeks after WestJet, one of Air Canada’s main competitors, announced a similar change, increasing their checked baggage fees by $5 as well. However, Air Canada and WestJet are not the only companies to alter their fees surrounding baggage recently.

“American Airlines 10 days ago, raised their (baggage fees) by $5 and in quick succession United, Delta, Allegiant, Spirit, Frontiers… and now Air Canada, so it’s all practically follow-the-leader,” said John Gradek, a faculty lecturer and coordinator of the Aviation Management Program at McGill University. “They pay a lot more attention to the price for the base fare and want to make sure they remain competitive.”

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In a statement to National Post, a WestJet spokesperson said, “Effective February 15, 2024, WestJet’s checked baggage fees have increased by $5 for first and second checked bags… There are no changes to our carry-on baggage policy.”

WestJet said that they alter extra costs like baggage fees in order to keep ticket prices low and, according to Gialloreto, airlines face constantly altering operation costs depending on worldwide trends.

“Labour costs have gone way up, plus we have a shortage of pilots and technical staff,” Gialloreto said. “The cost of fuel has not really come down very much and that’s the second biggest driver in terms of cost for the airlines.”

Gialloreto said airlines are much quicker to make changes to what is called ancillary fees, like baggage or food, than airfare prices, as customers react more viscerally to increases in the base cost.

“If you raise your airfares, they will have a dampening effect on demand,” Gialloreto said. “Increasing fees does not have that same elastic impact because most customers consider fees inevitable.”

A decade ago, flyers were able to check one bag without worrying about paying, but, in 2014, the major Canadian airlines, including WestJet and Air Canada, introduced a $25 checked bag fee. Price increases for checked baggage have the secondary effect of increasing the fervour and demand surrounding carry-on baggage, which, at the moment, is still free on Air Canada and WestJet flights.

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“(Carry-on baggage is) the next domain that will be looked at,” said Gradek. “There is a fight for real estate on board those bins in aeroplanes… This (change) is going to further exacerbate that issue, because rather than checking it, people will stuff as much as they can in their carry-on.”

In Gradek’s opinion, changes like these are also a way for airlines to test the water on changes they may want to make in the future.

“I think we’ve just seen the tip of the iceberg,” Gradek said. “I think the lack of reaction in the marketplace to this baggage increase, in my opinion, is a harbinger of what we can expect from the airlines. The airlines say ‘if I can get away with $5, maybe I can get away with $10, maybe I can get away with charging you $50 for your seat selection instead of $25…’ ‘I’m paying $1000 for the ticket, so what’s an extra $10?'”

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