Canadian Airlines Boost Profit from Passenger Baggage Fees
Published By : 18 Feb 2015 | Published By : QYRESEARCH
The checked baggage fees are induced for two major airlines in Canada. These charges are a part of the ancillary fees that also includes fees in flight meals, premium economy privileges and other seating arrangements – all of which that airlines have tapped to boost profits.
According to the CEO Air Canada the airline company will use whatever the available tools are at their disposal in the effort to drive the profitability. The CEO said during a conference call at its 2014 results. This was in reference to the additional seating, fee hikes, and raising airfares.
The subsidiary revenues for Air Canada increased 18 percent in the fourth quarter today from a year before. This was due to the charge on the first checked bags at large. The rule was introduced in November for routes in Mexico, Canada, and the Caribbean.
For the whole year the revenues increased 10 per cent with no specific dollar figures.
Meanwhile, even the WestJet Airlines boosted its estimated revenue from the fees by nearly 11 per cent to $100 million. The carriers introduced a charge fee of $25 to check bags first on the lowest-class-flights.
The airlines had predicted that passengers would use carry-ons and limit themselves to only one suitcase; however, that did not happen. Initially passengers opined their frustrations at the bag charges but airlines made their way to add even more fees.
Even the Porter Airlines charges a checked bag fee. Similarly, there are many discussions about the fee at airports.
Canadian airlines are trying to compete with the global airline industry.
WestJet airlines fees increased 31 percent to around $216.5 million last year. Ancillary revenues stood at US$49.9 billion in 2014 double than US$22.6 billion in 2010. The total fees should account for 6.7 per cent of all the revenues.
The AtlaCorp Capital expects the airlines to collect an additional fee of $50 million and extend onboard Wi-Fi services.