Air Canada simplifies fees as fuel prices drop

Air Canada will fold all fuel surcharges into its base airfares on North American routes, in response to recent steep declines in fuel prices.
Air Canada will fold all fuel surcharges into its base airfares on North American routes, in response to recent steep declines in fuel prices.Air Canada
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Air Canada has decided to eliminate all the second-checked-bag fees it began charging in the spring when fuel prices soared and to incorporate all fuel surcharges into its advertised base fares on North American flights.

The airline said it decided on the initiative in response to decreasing fuel prices. Air Canada said it was the first major North American carrier to remove the second-checked-bag fees introduced by airlines this year to help offset record high oil prices.

"Although the cost of fuel remains highly volatile and far above historic norms, the recent retreat in oil prices is enabling us to reinstate our previous baggage policy," said Ben Smith, Air Canada's executive vice president and chief commercial officer.

Smith said Air Canada would eliminate its second-checked-bag charge on its North American Tango and Tango Plus economy-class fares, "reflecting our customers' expressed preferences."

"Further, Air Canada is making its pricing more transparent by removing add-on fuel surcharges for flights within North America and instead adjusting its base fares to cover the total cost of fuel," said Smith. "These initiatives are made possible by the recent relief from all-time high oil prices and even though fares will remain dynamic, Air Canada is committed to everyday low prices and will continue to match the lowest fares in the marketplace."

As a powerful player in the U.S.-Canada transborder market, Air Canada is setting an example that large U.S. airlines could be forced to follow. However, Northwest Airlines said last week it did not plan to reduce fuel surcharges even though oil prices have declined by more than a third since mid-July.

In putting into effect its newly simplified fee structure, Air Canada is:

? Eliminating from Sept. 23 its C$25 fee for second checked bags, which the airline introduced on May 15 for its Tango and Tango Plus fares within North America.

? Incorporating into its advertised prices the airline's one-way, add-on fuel surcharge, which is ranging between C$20 and C$60 on domestic and U.S. transborder flights. Yesterday Air Canada began adjusting its published fares to include the total cost of fuel in its advertised base fares. Air Canada expects the move to make its fare structure simpler and more transparent for customers.

? Simplifying its excess baggage fees from Oct. 14 by introducing a single C$75 fee for travel within North America (C$100 international) for overweight and/or oversize pieces. For Air Canada, this new policy will replace the standard industry practice of imposing individual fees for each situation. For bags exceeding the free allowance, Air Canada's excess-piece fee will now include any applicable overweight or oversize fees. The airline offers a 10 per cent discount on excess-piece fees when fees are paid while checking-in online or at an airport self-service kiosk.

The airline said it would continue to review its policies to determine what adjustments should be made so that, against a backdrop of high and volatile fuel prices, it continues to provide the products and services that respond to customer demand.

Montreal-based Air Canada, a founding member of the Star Alliance global airline alliance, flies passengers and cargo to more than 170 destinations on five continents. It is the 14th largest commercial airline in the world and flies 34 million customers and their goods annually on a fleet of 335 aircraft.