Air Canada has announced plans to make its basic economy fares more restrictive as of 2025, and it will have major implications for passengers.
Air Canada basic fares lose carry-ons, seat changes
Air Canada’s basic fares will have two new restrictions as of 2025. These changes apply specifically to flights within North America, as well as to flights to sun destinations, which include the Caribbean, Mexico, and Central America.
First of all, for tickets purchased as of January 3, 2025, these fares will no longer include a full size carry-on bag. Instead, passengers on these fares will only be able to bring a small personal item onboard at no extra cost.
Larger items will have to be checked before security, at the cost of $35 for the first bag and $50 for the second bag. Passengers arriving at the boarding gate with an ineligible carry-on item will be required to check the bag for a $65 fee.
Second of all, as of January 21, 2025, passenger traveling on basic fares will no longer be able to switch their seats from the one that’s automatically assigned to them at check-in.
Under the current policy, basic economy passengers are assigned a seat at check-in, but can then switch the seat at no cost. The new policy will require passengers to pay extra if they want a different seat than what they’re assigned.
The good news is that Aeroplan status members, Star Alliance Gold members, and Aeroplan premium credit card members, will be exempt from these policies, and will continue to be allowed to take a carry-on bag and select a seat.
Air Canada’s motivation for this policy change
Air Canada’s motivation for this policy fare is pretty simple — airlines offer basic fares and make them punitive with the goal of getting people to buy-up to a higher fare bundle. Airlines want to be able to market low fares, but also obviously want to get as much revenue from each passenger as possible.
Maybe someone sees a good Air Canada fare through an online travel agency, decides they want to book, but then determines that it makes sense to pay extra to avoid punitive restrictions. At least that’s the consumer psychology behind these fares.
But why is Air Canada making this change now, nearly seven years after having introduced basic fares? It kind of makes sense competitively:
- WestJet recently made its basic economy fares more restrictive, even rebranding them as UltraBasic; they no longer include carry-on bags, or the ability to assign a seat of choice at check-in
- Porter is growing at a fast pace with its Embraer E195-E2s, and the carrier’s basic fares also don’t include carry-ons, or the option of selecting a seat
Obviously Air Canada wants to be able to compete with its two biggest rivals in Canada. For that matter, Air Canada has a transborder joint venture with United, and United is the only one of the “big three” US carriers to not allow carry-ons with basic economy fares.
Competitively, I can see why Air Canada is making this change. Obviously this isn’t good for those who frequently book basic economy fares. Meanwhile I see some elite members happy about this change, in hopes that it will lead to more open overhead bin space, and speedier boarding.
Bottom line
As of early 2025, Air Canada is making basic fares more restrictive. The airline will no longer allow carry-on bags on these fares, and also won’t allow passengers to switch seats from the one they’re assigned at check-in without paying a fee. However, elite members and premium credit card members are excluded.
Air Canada simply seems to be catching up with the competition, as WestJet and Porter have the same policies, and joint venture partner United also has the same restrictions.
What do you make of Air Canada adding restrictions to its basic fares?
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