Fear of flying and paying

The truth behind those extra fees charged by airlines.

“I got this baggage with me / Don’t wanna make you pay for what somebody else has done to me / I don’t know what to do.”  Those lyrics from singer Mary J. Blige’s song “Baggage” can now resonate with anyone deciding to fly because airlines do know what to do with your baggage: they want you to pay for it.  Back in September, WestJet announced it would start charging for passengers’ checked luggage on select flights.  Air Canada followed suit and made a similar announcement just days later.

“Passengers don’t mind paying for some things,” says Mary-Jane Bennett, researcher at Canada’s Frontier Centre for Public Policy.  “But as baggage fees are supposed to be part and parcel of the fee they already pay, passengers see them as an irritant.”

These fees come at a time when travel has become relatively cheaper than it used to be what with the emergence of budget travel sites like Travelocity and Airbnb.  Back in 1960, Trans-Canada Airlines — now Air Canada — decided to lower fares as a promotion, which included a “17-day transatlantic excursion” in Europe for $299.  Adjusting for inflation, that amounts to almost $2400 today.  A similar 17-day round trip from Toronto to Paris, just as an example, in May 2015 and flying with Air Canada will only set you back $767.

MoneybagPoster

The problem Canadians are facing is that so-called ‘low-cost’ airlines like WestJet no longer classify as such.  As an example, a week-long round trip from Toronto to New York would cost you almost $800 with WestJet and that’s with the cheaper fare option.  Surprisingly, Air Canada actually has a cheaper price with a price tag of just over $427 with its flex fare options.  It’s probably safe to say that both airlines are fairly on-par price-wise when comparing other flights.

Prices may be cheaper for tickets, but airlines have found other ways to make money.  One not-so-hidden fee that airlines charge customers is the price of fuel which is charged as part of the ticket.  But some have begun to wonder if the falling price of fuel, which has meant lower gas at the pumps, will translate into lower airline ticket prices.  Brie Ogle, a media relations adviser at WestJet, says no.

“Canadian airlines… pay for fuel in U.S. dollars but obviously, our dollar worth 88 cents, we’re getting hit hard by foreign exchange,” says Ogle.

Ogle also says that WestJet paid more for fuel in the first nine months of this year than they did in the first nine months of last year.

When asked about how much WestJet would stand to gain from the new fee, Ogle said that it was hard to say because it is part of “ancillary revenue.”  Back in 2010, WestJet announced that it would be charging customers a $20 fee for their second checked bag.  The move was projected to bring in an extra $8 million to $10 million in revenues per year.  This number most likely increases when deducing that customers travelling with at least one checked bag are now being charged between $25 and $29.50.  But Ogle says that the fee only affects one in five of its customers.

As per usual, the Canadian airlines decided to take a page from their neighbours to the south.  The U.S. airlines have had baggage fees for a couple of years now and made more than   $3.35 billion from them last year.  Glenda Rojas, a California resident and frequent traveller to places like Texas, Miami and Canada, says she hates these fees.

“Every time I travel they charge me $25 per luggage,” says Rojas.  “As if airlines weren’t overcharging us already on our flight fares.”

While it doesn’t look like these fees will be going away anytime soon, in Canada or the U.S., this has left some wondering about Canada needing another airline.  This should serve to remind Canadian airlines that if the fees keep coming, Canadians will find a way to take their business elsewhere.

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