Stepping back from the brink: Air Canada lowers rates

Air carriers have been loading on fees and surcharges, but now that one is reversing course, will there be a price war in the other direction? That remains to be seen, but for now, Air Canada is the first airline to relax some of its customer charges. In an announcement earlier today, the carrier stated that it will no longer be charging many of its customers for their second checked bag.

Even more important, Air Canada stated that it will no longer add a fuel surcharge onto the cost of flights; instead, it will be integrating any excess gas fees into the price of tickets. While customers will basically have to pay the same amount, they will no longer be surprised by an additional $20 to $60 fee tacked on at checkout.

Beyond offering customers a price break, Air Canada's recent changes represent an impressive attempt at transparency. Rather than offering a great price and subsequently charging for everything but air, Air Canada is taking the revolutionary step of actually letting customers know what they're getting for their money. It's a bold, crazy move, and I hope it works!

Airline Woes in 2008

    Bucking the trends, Air Canada said it's scrapping its fee for a second bag and folding fuel surcharges into its published fares. In June, Air Canada said it would cut 2,000 jobs and reduce trips by seven percent in its fall and winter schedule.


    Citing higher fuel prices, United Airlines raises the fee it charges to check a second piece of luggage to $50. Travelers in first or business classes, "Premier" frequent fliers, and active-duty military personnel traveling on orders will be exempt.

    Joe Raedle, Getty Images

    Alaska Airlines will cut between 9 percent and 10 percent of its 10,000 employees, from across all of its operations.

    Damian Dovarganes, AP

    In mid-August, United Airlines announced that it would no longer offer free meals to coach passengers on international flights, but there was such a backlash from customers, that the airline e-mailed passengers and said: "We heard you" and changed the policy before it was to begin in October.

    Eric Risberg, AP

    Italy's failing national carrier Alitalia said Friday that it has filed for bankruptcy protection, the latest development in an ongoing effort to restructure the loss-making airline.

    Vincenzo Pinto, AFP / Getty Images

    Canadian airline Zoom apologized to passengers Aug. 28 after canceling all of its flights. The company said that it had to suspend operations after action was taken to recover money that it owed to creditors.

    AFP / Getty Images

    United Airlines plans to furlough 1,550 flight attendants by Oct. 31 as it cuts back its flying this fall.

    Paul J, Richards, AFP / Getty Images

    Effective Jan. 11, discount carrier Southwest Airlines will cut capacity by 196 flights, nearly 6 percent of Southwest's nearly 3,400 daily flights.


    Responding to calls from lawmakers and veterans groups, many of the nation's airlines are waiving bag-checking charges for active service members, often carrying heavy duffel bags stuffed with body armor and other vital combat equipment.

    Charles Ommanney, Getty Images

    Pilots say airlines are forcing them to fly uncomfortably low on fuel in an effort to save money. Less fuel means less weight, which means better fuel efficiency and lower costs for airlines, but pilots are complaining that passengers' and crewmembers' lives could be at risk.

    Aziz Shah, AP

Looking back over the past couple of months, I'm blown away by the number of posts that I, and others, have written about the airline industry. Admittedly, there's been a lot to talk about: between adding extra charges for checked baggage, making passengers pay for pillows, cutting out the free peanuts, and slowing down flights to save on gas, airlines have transformed themselves into a nickel-and-dime operation, in which everything is a la carte and passengers are magically transformed into cattle.

As painful as this has been, it has sprung, in part, from a very real and legitimate problem. The same skyrocketing price of petroleum that has tortured motorists has also undermined the airline industry. In the face of ever-increasing fuel prices and ever-decreasing revenues, they have responded by trying to find every method possible to eke out income. On the bright side, just as gas prices have fallen at the pump, jet fuel prices have also dropped, increasing the airlines' profit margin and making it possible for them to drop some of the extra charges that they've inflicted upon passengers. We'll have to see if any other carriers follow Air Canada's lead!

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He's just hoping that U.S. carriers don't get any bright ideas about charging for air. In fact, he's already regretting that little wisecrack!
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