Breaking News! Westjet To Charge Travellers For First Checked Bag

[acsidestick]

Fido, I disagree.

Those efficient cheap airplanes cost three times as much. They are saving 20% on fuel that has quintupled. Landing fees that have increased 2000-3000% plus so many new taxes that they now exceed the carriers fare. Through this whole time, ticket prices are the same as 40 years ago.

[Seeker]

Look way back in history. the cost of a ticket from YYZ to YVR is virtually unchanged or even cheaper than 40 years ago (dollar for dollar) but the costs have escalated a lot since then. The price of the airfare did not keep pace with the cost of providing the service. So here we are in 2014 with most airlines struggling to make a measly profit.

This is what drives me crazy. People whining and complaining 'cause it cost soooo much to fly. I had some passenger blabbing in my ear in the Tim's line because his ticket to fly clear across the country for $300 was obviously a ripoff.

I told him to check with Greyhound, can save a few bucks but it will take 3 days instead of 5 hours.

[Guest longtimer]

Brighter skies in Western Canada set stage for low-cost air travel

‎Today, ‎September ‎17, ‎2014, ‏‎33 minutes ago | Jamie SturgeonGo to full article

A new report published Wednesday suggests “ above average economic growth” across Western Canada in recent years has created the right conditions for another shot at super low-cost air travel in the region, and perhaps across the country.

The number of air travellers British Columbia and Alberta is growing at a faster clip than other regions, according to the Conference Board of Canada, thanks to a brisker pace of economic activity.

The brighter prospects “have created the right context for the launch of new carriers, especially in the ‘ultra-low cost’ segment, which remains essentially nonexistent in Canada,” according to the report.

Super low-cost air travel is widespread in Europe, Asia and routes spanning the United States. But the model has struggled to sustain itself here.

The fresh vote of confidence comes as up to three new lower cost airlines prepare to launch services.

Jetlines and Jet Naked are two ultra low-cost startups hoping to open up routes as early as next year. U.S. carrier Southwest has also said publicly it intends to add flights north of the border.

Jetlines president David Solloway said in a July interview his company is seeking financing to help it begin offering airfares on routes beginning next spring. Vancouver-based Jetlines plans to launch initially in western provinces.

But “both [Jetlines and Jet Naked] are planning to fly to domestic and sun destinations,” the Conference Board’s Kristelle Audet, who authored the report, suggests. And “at prices that are a fraction of those currently advertised by Air Canada and WestJet.”

MORE: New air carrier Jetlines aims for spring 2015 launch

Audet said the number of passengers travelling through Western Canadian airports is up substantially this year. Traffic levels in airports further east meanwhile aren’t growing nearly as fast (see chart).

The carriers plan to slash ticket prices by unbundling every service that’s typically rolled up into an airfarce, reducing the base cost and charging extra for everything else, including luggage, snacks and upgraded seating.

“Basically you purchase a seat and seatbelt,” Solloway told Global News in late July.

“It’s a very strict business model. The whole focus is to provide safe, comfortable jet service to Canadians at the lowest possible price.”

Tightly packed flights as well as non-unionized staffs that aren’t paid as much as workers at Air Canada and WestJet will also keep prices way down, Audet suggested.

Flying just a few routes that aren’t dependent on connecting flights is another means of lowering the ticket price, experts say — simple point-to-point flights in a handful of destinations.

Departures

Still, the ultra low-cost approach of Jetlines and Jet Naked carries big financial risks, the report said, echoing other experts who are uncertain about the viability of the model in Canada.

“In the past, this strategy has proven difficult to implement in Canada,” Audet said.

Canada 3000, Jetsgo, Harmony and Zoom Airlines are four examples of operators who have foundered in the past decade or more.

“Even WestJet has moved away from the low-cost strategy that characterized its operations in its early days,” Audet said.

WestJet said this week it will begin charging $25 on economy passengers for their first bag of checked luggage, a move experts say Air Canada is likely to match.

And as airfares between Canada’s two biggest airlines increasingly resemble each other, there’s an opportunity for lower-cost operators, experts say.

“It opens the door to a new entrant stepping into the market with a traditional low-cost model,” Ben Cherniavsky, airline analyst at Raymond James, said in a recent note.

Big discounts

Cherniavsky said such services could initially sell tickets for half what WestJet and Air Canada sell the same flights for.

“Indeed, real low-cost/low-fare carriers usually cut existing fares by 40-50 per cent – or more! – in order to stimulate demand,” the Raymond James analyst said.

http://globalnews.ca/news/1568458/brighter-skies-in-western-canada-set-stage-for-low-cost-air-travel/

[Fido]

Fido, I disagree.

Those efficient cheap airplanes cost three times as much. They are saving 20% on fuel that has quintupled. Landing fees that have increased 2000-3000% plus so many new taxes that they now exceed the carriers fare. Through this whole time, ticket prices are the same as 40 years ago.

Of the total cost pile:

Cost of ownership is less than 10%

Landing fees, terminal charges, airport rents less than 10%

New taxes and fees like GST, NavCan, AIF's are a pass through to the consumer

Fuel anywhere from 35% to 50%

The improvements in technology have allowed the fares to stay low.

[Fido]

att

[CanadaEH]

They don't like what is happening and your reaction is that is because they are uninformed?? Your reply does not make any sense at all.

Respectfully, there are employees out there that think that because we don't charge for a first bag, people flock to us and avoid the competition. If this were true, Allegiant and other cross-border airlines wouldn't be stealing millions of passengers every year. There are employees out there see today and yesterday, they don't see tomorrow. ULCC competition is coming and it's going to change the shape of our industry. There are employees out there that think pennies don't matter. Pennies make the millions and they keep us employed.

I am in the fortunate position to be informed, and I in turn keep my employees informed. Can't say the same for other employee groups.

[better4me]

Passengers need to be trained not to bring 7 pair of socks, underwear, shirts and pants for a 7 day trip. They don't need 5 pairs of shoes. They don't need to bring their giant cans of hair spray and Costco sized shampoo bottles. They don't need 50 diapers for their baby for the week.

Tell that to my wife, but don't say i didn't warn you about the dangers of coming between the Mrs and her shoe collection.

[Kip Powick]

OFF Topic...bit of a tangent..... but well you know...some women

A buddy of mine was having his sister-in-law come onboard his boat, (which was a 27 footer)....... for a weekend.

He told her to pack light

She arrived with two suitcases...one was full of nothing but shoes !!!!

[boestar]

I can fit a 4 day trip into a regulation carry on bag with no issues. 10 days overseas this summer and I had a full size bag that I could likely have put a carry on inside of. I only need one set of clothing per day and if packed correctly you can easily fit 2 weeks into a standard case. (I only own 2 pairs of shoes)

[Thebean]

http://aircanada.mediaroom.com/index.php?s=43&item=807

Matched. Anyone who is surprised by this needs their head examined.

WJ will likely adjust its implementation date and credit those guests who got caught in limbo, thereby pretty much ensuring they'll be back.....

[Zan Vetter]

I call those "hero" packing stories, the kind you find in the style section of the newspaper or in the enroute magazine. Typically it's a single person- either young twenty something, single business traveller, or even a couple whose kids are no longer dependent. So yes, it is possible for a single human to pack a small bag even sometimes for an extended trip. But honestly who goes to the laundromat on a week holiday. You have six days to enjoy, you want to blow a half day cleaning your clothes? Diapers...does any parent want to bring 12 diapers only to have to- before doing ANYTHING ELSE- find a store at which to buy diapers once they arrive? Perhaps some are forgetting how much babies crap. I have young kids now and trust me it is a lot.

The whole "hero" mindset comes from a place rooted in a notion that travel is something to be endured, not enjoyed. DONT BRING CLOTHES, DONT BUY GIFTS, etc.

I still think bag check is an integral part of travel and unbundling it could rightly be left to the discounters. Let's talk about carry-on. They should charge for that. You should get a single bag- ipad, book, headphones, neck pillow...done. You don't need your friggin ski boots in the cabin, but that's where they will be when bags are $25.

[Guest longtimer]

Respectfully, there are employees out there that think that because we don't charge for a first bag, people flock to us and avoid the competition. If this were true, Allegiant and other cross-border airlines wouldn't be stealing millions of passengers every year. There are employees out there see today and yesterday, they don't see tomorrow. ULCC competition is coming and it's going to change the shape of our industry. There are employees out there that think pennies don't matter. Pennies make the millions and they keep us employed.

I am in the fortunate position to be informed, and I in turn keep my employees informed. Can't say the same for other employee groups.

Perhaps but I did say customers...

[acsidestick]

AC just announced it is following suit starting September 18 for travel November 2 on Tango fares

[Tango Niner]

A day earlier than Bean predicted

http://www.theglobeandmail.com/report-on-business/air-canada-to-charge-for-first-checked-bag-following-westjets-lead/article20653474/

[Super 80]

There's cost involved in providing a checked baggage service. Asking those who use the service to pay for it isn't nickel-and-diming them in my opinion.

Air travel was usually more pleasant before the LCCs came along and legacy carriers went to "unbundling" of their services to compete, but it was also more expensive. The public wanted cheap seats. They got them. They now need to pay up if they want food on board, want the airline to handle their baggage, or want seats in a specific area of the cabin. I don't see the problem, and I'm amused by all the whining.

Except "unbundling" isn't what is happening and that's where the "whining" comes from.

A vendor my employer works with is "unbundling" mostly because the "value added" in VAR just wasn't logistically practical in most situations, we were further ahead doing it ourselves than trying to work around them. They weren't doing anything wrong, it just didn't work on a day-to-day basis. But they didn't keep prices the same and add service charges for the now unbundled services. The prices were cut 25-40% across the board. If we need service from them we pay for it by the hour, if we don't need it we don't. That is an improvement over having paid for something that we tended not to be able to use. With Rouge and bag fees an existing product was either replaced with a massively inferior, or specifically in the case of Rouge a nearly intolerable one for the same price, or services once included no longer are but the price remains the same. That is rightfully perceived to be nickel-and-diming. It's no different than "resort fees" and pay-to-pay fees. It's just tacky.

Although I look at this mostly from the perspective of delays and overhead bins being destroyed. On my last United flight I just about missed my connection in Denver because it took forever to get the door closed and there were two overhead bins placard inoperable and taped shut. Watching two women banging as hard as they could on another bin to get it closed after adding a backpack left nothing to the imagination.

It should be extra fun with WS since it appears their gate agents will let anything and everything into the cabin. Flying YYJ-YYC I couldn't believe it as a flight attendant helped a guy stuff a hockey bag into the overhead.

[CanadaEH]

The outrage!!!!

AC is charging it on flights to Mexico and Caribbean - which most media haven't pickup up on yet (WJ isnt).

[Guest longtimer]

Interesting EU ruling on luggage, note that they say hand luggage is essential and should not be surcharged.

18 September 2014 Last updated at 10:08 ET Airlines' luggage surcharges are legal, says European courtLuggage at airport Airlines face extra costs from processing and storing checked-in baggage, the court ruled

Airlines are within their rights to charge a supplement to customers checking-in their luggage, a court has ruled.

The European Court of Justice ruled that airlines faced extra costs storing and processing checked-in luggage.

But it added that hand baggage was necessary for passengers and should not face a price supplement.

The decision is a boost to low-cost carriers that have made optional charges key to their business models.

The court upheld a challenge by Spanish budget carrier Vueling Airlines against a Spanish law that prohibits airlines from making people pay for putting their suitcases in the aircraft's hold.

The airline was given a 3,000 euro (£2,362) penalty by authorities in Spain for adding 40 euros to the basic price of four tickets bought by one passenger for return tickets between La Coruna in Spain to Amsterdam in the Netherlands.

A Spanish court referred the case to Luxembourg to see if it complied with EU law on pricing freedom.

[internet]

WestJet announces first-bag seat sale: Airline upholds commitment to lower Econo sale fares

CALGARY, Sept. 1... http://t.co/uFvJUzOAYy

So the $186 YWG-YYC is supposedly lower?

It was $176 two weeks ago

[CanadaEH]

We'll be doing more seat sales and offering more sale fares. It doesn't mean we're going to offer cheaper sales fares than the week prior...

[internet]

That's not what your EVP said

" said Bob Cummings, Executive Vice-President,... "We said on Monday that we would lower Econo fares and offer even lower seat sale fares, and we're doing exactly that."

[Seeker]

We'll be doing more seat sales and offering more sale fares. It doesn't mean we're going to offer cheaper sales fares than the week prior...

Isn't that the very definition of a "sale" - cheaper than it was before? Increasing the fare by $50 and then giving $20 off and calling it a sale doesn't seem legit.

[Thebean]

It amuses me that people somehow believe that, unlike any other business, airline costs stay stagnant year after year.

They assume that if, for example, the airline costs are $3b one year and revenues are $3.3b, thus creating a $300m profit, that math never changes. If they collect an additional $60m in bag fees, the profit automatically goes to $360 million.

I don't know about you but unless I shrink my overhead, my operating costs, be they household or to run a boat or vehicle, increase every year and it seems like they increase at a rate greater than the inflation rate.

It's the same for any and all airlines.

To presume that every last penny of the bag fee increase goes to the bottomline is beyond simplistic.

Without doing anything, and assuming a static fuel price, I'd bet the cost of operating a $3b airline in 2014 would increase to about $3.060b in 2015, or about 2%. The bag fee revenue covers off a good chunk of the organic, inflationary cost increases and limits, but does not eliminate the need to raise fares for everyone.

When it is all said and done, without a drastic change in government policy, I remain unconvinced there is a compelling scenario out there that would result in a meaningful and sustainable reduction in the sorts of fares we currently see in markets that currently have an LCC competitor in place.

To expect US style airfares on a consistent basis in the Canadian cost and taxation environment is foolish dreaming.

There might be changes in fare "face rates" as airlines pile more fees onto the "ancillary" side of the equation, but the total "dollars out the door" for the average passenger is not going to change much, and certainly nothing like the change WJ brought to the market in the late 90s.

There will be meaningful fare reductions in markets currently served by solely by legacy, high fare carriers as LCCs appear on the scene.

However, in saying that, I don't believe there are enough of those sorts of markets remaining to become the core of a new airline operation.

[Super 80]

It amuses me that some people somehow believe that, unlike any other business, the airline industry should be immune to criticism for the same skeezy business practices the cell phone, cable, hotel, automotive industry and innumerable others also get called on.

Nobody likes teaser pricing and people especially don't like knowing they're getting less for their money than they previously did and they really, really don't like having their intelligence insulted.

It was WestJet's decision to make that winning a race to the bottom was worth torching an intangible amount of irrational public goodwill and introducing what will prove to be extremely tangible wear and tear and delays.

[FA@AC]

With Rouge and bag fees an existing product was either replaced with a massively inferior, or specifically in the case of Rouge a nearly intolerable one for the same price, or services once included no longer are but the price remains the same. That is rightfully perceived to be nickel-and-diming. It's no different than "resort fees" and pay-to-pay fees. It's just tacky.

I agree that AC has gone downmarket in a big way with Rouge. I also think that a lot of the travelling public were getting far more than they were paying for on many of the routes that Rouge now operates when AC mainline flew them.

CUN-YYZ one way can often be had for just over CAD $200. If an airline is going to be profitable it won't be providing 36" of seat pitch, free meals, free earphones, free newspapers or free IFE at that kind of fare. I don't equate charging a fee to those who want such amenities to be nickel-and-diming. I see it as entirely different to the "resort fees" that some hotels charge. "Resort fees", where charged, are unavoidable. Passengers on most airlines already have a free, (overly?) generous cabin baggage allowance. Checked baggage fees will apply only to those to need to travel with more than a roll-aboard and one smaller item of cabin baggage, or who do not wish to bring their baggage into the cabin with them. Those who purchase a $200 ticket with a $3 margin can cry me a river if they have to pony up to bring additional baggage with them.

[CanadaEH]

That's not what your EVP said

" said Bob Cummings, Executive Vice-President,... "We said on Monday that we would lower Econo fares and offer even lower seat sale fares, and we're doing exactly that."

Not being involved with the revenue side of the business I don't know what to tell you. I was told that many of the fare buckets would see reductions in pricing. I have no reason to believe that's not correct.