Air Canada launches Basic Economy fares

Air Canada joins the ranks of airlines offering Basic Economy fares. The carrier formally launched the new fare families today with a suite of five options available, depending on the market. Like other airlines the company is marketing this change as an opportunity to “give its customers greater flexibility to select the airport and onboard amenities they want when travelling.” And, like other airlines, the net result is almost certainly a fare increase compared to the same services and fares offered today.

“Air Canada recognizes that people have different requirements when they travel, so we are expanding the range of choice for our Economy customers with our new suite of fares. Each fare type offers customers specific attributes as well as options to purchase additional benefits and amenities that vary based on the type selected, such as extra legroom, upgrade eligibility, or lounge access.” – Lucie Guillemette, Executive Vice President and Chief Commercial Officer at Air Canada.

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The five Economy fare types and their features are:

• Latitude – Fully refundable ticket; Priority check-in; two complimentary checked bags; advanced seat selection and access to Preferred Seats when available; complimentary Air Canada Bistro Voucher; same-day changes; 125 per cent Aeroplan Miles accrual; and Maple Leaf Lounge access for purchase.
• Comfort –  Same-day standby (previously only available with Latitude); advanced seat selection and access to Preferred Seats when available; complimentary alcoholic beverage; complimentary checked bag; early boarding; 115 per cent Aeroplan Miles accrual; and Maple Leaf Lounge access for purchase.
• Flex – Ticket changes permitted for a fee; advanced seat selection; complimentary checked bag; 100 per cent Aeroplan Miles accrual; and Maple Leaf Lounge access for purchase.
• Standard (Formerly Tango) – Ticket changes permitted for a fee; 50 per cent Aeroplan Miles accrual for transborder flights and 25 per cent Aeroplan Miles accrual for domestic flights.
• Basic – Air Canada’s most restrictive fare option will be available only for select routes and flights and for booking exclusively through Air Canada channels.  These low fares do not permit changes, are not eligible for upgrades, and do not earn Aeroplan Miles.  Customers have the option to pay for checked bags, advance seat selection, and food and alcohol on board.

Those categories are not too surprising, though the additional tiers raise some potential customer confusion, particularly when considering the ancillary fees for the various add-ons being marketed. Looking more closely at the chart the company produced suggests that the Air Canada version of fare families may be one of the most advanced we’ve ever seen roll out. It doesn’t hurt that the team driving this transition had hands-on experience doing the same at United Airlines.

Lots of things can cost extra, depending on what fare family the passenger starts in. More significant, however, is that the price of the add-ons is going to vary based on the fare family. Want a “preferred” seat assigned in advance? Expect to pay more for that on a Basic fare than on a Flex ticket. Choosing any seat in advance will cost more for the Basic bookings compared to Standard. Upgrades and lounge access will also vary in price based on the published chart. Specific prices are not mentioned in the release.

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Once on board, however, most passengers will have a common experience. Latitude travelers will receive a voucher for a free snack and alcoholic beverage while Comfort gets just the free drink. Everyone else has the same paid options once inside the plane. Trying to differentiate pricing for the on-board options would be a mess not worth pursuing, mostly for the problems it would create for flight attendants. That said, there are some creative technical solutions that could remove those barriers going forward.

It is also interesting that Air Canada is choosing to call out the frequent flyer program earning rates in the fare descriptions. While other carriers have identified limited earning on the Basic fare categories the specific listing of the other rates is different. Perhaps because the variable earn rates are less common in North America, but still interesting to see presented that way. It does not necessarily signal whether a revenue-based program is coming when the carrier replaces Aeroplan in 2020, though that remains the likely outcome.