Transport Minister to summon airline CEOs as Air Canada set to charge carry-on fees for some passengers

Posted on December 4, 2024 by Peggy

Transport Minister Anita Anand says she will be calling Canadian airline CEOs to a meeting in mid-December after Air Canada says it will charge some passengers for carry-on bags in the new year.

“Let’s just say I’m not very happy today with what I’ve heard from Air Canada,” Anand said in an interview with CTV Power Play with Vassy Kapelos on Wednesday. “I think they need to take a look at the persons that they are targeting with these excess fees. It is not acceptable.”

Starting on Jan.3, Air Canada passengers buying basic fare tickets for North American and sun destinations will have to pay a carry-on fee of $35 for the first bag and $50 for the second. Small personal items like a purse or computer bag will still be allowed on board for free. Those passengers will also be charged for seat selection change at check-in, starting on Jan. 21.

In a statement to CTV News, Air Canada says the new charges are “not new in the Canadian industry and is merely our competitive response,” adding the company “will be pleased to explain this to the government if desired.”

Speaking to Kapelos, Anand says she recognizes the extra fees are a business decision made by Air Canada, but says she is “extremely disappointed.”

“This is not acceptable at a time when Canadians’ pocketbooks are hurting and when they’ve been saving for their travels,” Anand said.

Back in June, WestJet rolled out its “UltraBasic” ticket tier that does away with a free carry-on bag and charges a fee for seat selection, including after check-in, whether online or in-person. Discount carrier Flair Airlines has a similar policy.

Air Canada tells CTV News that “the adjustments we have made to certain of our fares is a commercial decision that we took only after our main competitors in Canada enacted similar policies quite some time ago.”

In her upcoming meeting with airlines later this month, Anand acknowledged that “each airline is different” but said she “will deal with all of them in one room at one time.”

During the COVID-19 pandemic in 2021, the federal government reached a deal with Air Canada to provide a nearly $6 billion bailout package. As part of the agreement, the government purchased $500 million worth of the company’s shares, representing a six per cent equity.

In her interview with Power Play, Anand pointed to what she described as a “specific relationship” with Air Canada due to that loan.

Asked by Kapelos whether she will use the federal government’s equity in Air Canada to leverage change, Anand said she’s “examining the particular legal relationship right now” and will have more to say “in the days ahead.”

More than two years ago, the Liberals promised changes to what is informally known as the air passenger bill of rights, following significant travel delays and cancellations both over the summer months and during the 2022 winter holiday season.

The 2023 budget laid out a series of measures to strengthen air passenger rights — including measures to increase levels of service and reduce delays — but those didn’t relate to added fees associated with flight costs.

The federal government also promised that spring to table legislation to make further changes to the air passenger rights regime, first passed in 2019 and updated in late 2022.

Despite having wrapped consultations on the proposed changes more than a year ago, a representative of the Canadian Transportation Agency (CTA) tells CTV News there is “no timeline” for when the draft proposals will be made public.

When pressed by Kapelos about the delayed timing on the update to the air passenger bill of rights, Anand said she is “pushing for an accelerated timeline.”

“I am very much of the view that passengers deserve particular rights as the main consumers on these airlines, and I’m very concerned with ensuring that we have more and more competition in the airline industry,” Anand said.

There is currently a backlog of more than 80,000 air passenger complaints at the CTA.

Asked about the lack of competition and quality of airline service in Canada, Anand insists she is “focused on excess fees across all sectors” and is “very much focused on ensuring passengers have rights in this sector.”

With files from CTV News’ Spencer Van Dyk

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