Checked baggage fees are paying off for Canada’s two major airlines.
The charges are part of ancillary fees – which also include passenger fees for preferred seating, in-flight meals and premium economy privileges – that airlines have tapped to boost profits.
“We’ll use whatever tools we have at our disposal to drive profitability,” Air Canada CEO Calin Rovinescu said last week during a conference call about its 2014 results, making reference to fee hikes, additional seating and raising airfares.
Air Canada’s ancillary revenues per passenger grew 18 percent in the fourth quarter from a year ago, largely due to the charge on the first checked bags, introduced in November, for routes in Canada, Mexico and the Caribbean. For the full year, these revenues grew 10 percent. It did no provide specific dollar figures.
WestJet Airlines (WJA.TO), meanwhile, recently boosted its forecasted take from the fees by 11 percent to $100-million.
In the fall, the carriers introduced a $25 fee, plus tax, to check first bags on some of the lowest-class flights – affecting about 20 percent of passengers.
More details here.
