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Canadian airline execs to address govt panel on fees

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Canada Transport Minister to meet Friday with airline

execs

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Analysts calls ancillary revenue mainstay of airline

business

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(Adds context from U.S., details)

By Allison Lampert and Rajesh Kumar Singh

MONTREAL/CHICAGO Dec 11 (Reuters) - The CEO of Air

Canada ( ACDVF ) will address a Canadian parliamentary committee

on Friday about carry-on baggage fees, according to a meeting

notice, after Canada's largest carrier this month announced new

charges for some passengers.

Lawmakers in both Canada and the United States have

criticized airlines in recent weeks for levying additional fees

on luggage and seat assignments, following an outpouring of

anger by passengers on social media.

Analysts say ancillary revenue earned from charges like

baggage fees has become the mainstay of the airline business

worldwide. Ancillary revenue is estimated to jump 26%

year-on-year to $148.4 billion in 2024, accounting for about 15%

of airline revenue across the globe, according to a report by

travel consultancies CarTrawler and IdeaWorksCompany.

Air Canada ( ACDVF ) Chief Executive Mike Rousseau will speak by

videoconference, joining other airline executives, after the

carrier said last week it would charge passengers for bigger

carry-on bags if they opted for its lowest-priced fare for North

American and Caribbean routes starting on Jan. 3.

Alexis von Hoensbroech, CEO of WestJet Airlines, which has a

similar policy, will also address the Standing Committee on

Transport, Infrastructure and Communities, according to a

meeting notice. Charges will also be discussed during a Friday

meeting between Transport Minister Anita Anand and Canadian

airline executives.

Air Canada ( ACDVF ) said the changes would bring its basic fare

structure in line with the "industry standard." Those passengers

can board with one small personal item like a purse, but require

larger items like a duffel bag to be checked for C$35 ($24.78).

Earlier this month, a bipartisan group of U.S. senators

called out rising airline fees following testimony by executives

from American Airlines ( AAL ), United Airlines, Delta

Air Lines ( DAL ), Spirit Airlines ( SAVEQ ) and Frontier.

"Airlines these days view their customers as little more

than walking piggy banks to be shaken down for every possible

dime," Senator Richard Blumenthal, a Democrat who chairs the

Permanent Subcommittee on Investigations, said at the hearing.

A Senate subcommittee report last month found that U.S.

airlines have generated billions of dollars in revenue from

ancillary fees by charging customers extra for seat assignments

and luggage. The report disclosed that American, United, Delta,

Spirit and Frontier collectively earned $12.4 billion in revenue

from seat fees between 2018 and 2023.

While United charges its lowest-paying travelers $35 for a

bag, both American and Delta currently do not charge basic

economy passengers for a carry-on bag.

($1 = 1.4125 Canadian dollars)