Economy Travel Not So Anymore with Air Canada, Starts Charging C$25 Checked Bag Fee

Flying economy with Air Canada has gotten a bit pricey. The company announced on Thursday some economy passengers will now be charged C$25 for their first checked bags.

The new first checked bag policy rule applies on domestic flights, as well as to the Caribbean and Mexico.

About 20 per cent of Canadian customers are expected to bear the new fee, the airline estimated, which is equivalent to five per cent of its customers system-wide.

Air Canada maintained the new policy was aligned with prevailing North American industry practices. The ones yet to employ the new scheme are U.S. lines JetBlue and Southwest.

In an investor conference in Toronto on Thursday, Michael Rousseau, Air Canada CFO, said they are just simply matching the market's trends because "it's what the market is bearing at this point in time."

David Tyerman, Canaccord Genuity's airline analyst, said in a note to clients the new first checked bag policy rule could create a $50-million bump in Air Canada's revenues in the first year.

But Air Canada may opt to implement base ticket price reductions to recover potential fiscal downfall due to the first-bag fee initiative.

Air Canada's new first checked bag policy rule will apply to bookings made on Thursday and later, for travel on or after Nov 2.

"Investors we love it of course...and for passengers it's a tough pill to swallow," Robert Kokonis, president of airline consulting firm AirTrav, told CTV News. "(But) a couple of months from now, the online chat boards will quiet down and people will grudgingly accept that this is the new reality."

Passengers who bought Economy Class tickets using Flex and Latitude fares that offer additional flexibility won't be affected by the new fee.

The new first checked bag policy rule also doesn't apply to Altitude Prestige, Elite and Super Elite members, Star Alliance Silver and Gold members and customers purchasing Air Canada Vacations packages.

Business Class customers will continue to enjoy an allowance of two checked bags, while military personnel (with identification) up to three checked bags, regardless of destination.

Checked-in car seats and strollers will be continued to be accepted free of charge.

WestJet earlier this week likewise announced a similar increase for first checked bags from $25 and $29.50 depending on provincial taxes for some economy class customers on flights within Canada and to the United States. Flights to Mexico, the Caribbean, Central America and Europe weren't included.