Proposed lawsuit claims Air Canada, WestJet colluded on checked bag fees
Published Tuesday, September 27, 2016 2:00PM EDT
Last Updated Wednesday, September 28, 2016 8:01AM EDT
A proposed class action lawsuit is accusing Air Canada and WestJet of colluding on plans to charge a checked bag fee.
The lawsuit, filed in Regina, claims the two Canadian airlines fixed the price for passengers’ first checked bags, and then colluded to introduce the fees within days of each other.
None of the allegations have been proven in court.
On Sept. 15, 2014, WestJet announced a $25 fee for the first piece of checked luggage for economy-class passengers on flights within North America. Three days later, Air Canada announced it would also charge its customers $25 for their first piece of checked luggage.
Part of the statement of claim states: “That Air Canada was ready to implement the same type of fee on its system by its staff only three days after WestJet’s announcement would be impossible to coordinate for Air Canada. The announcement within three days indicated collusion between the Defendants and the exchange of information between the Defendants and coordination of the same charges for the same class of customers.”
Tony Merchant, the lawyer representing the class-action lawsuit, told CTV News Channel on Tuesday, he believes he can establish that the airlines were acting in concert.
“Within three days, each of these companies came out with exactly the same charge, going after exactly the same customers … coincidence? Difficult to credit that that’s going to be accepted by the courts as nothing more than coincidence,” Merchant said.
He also said the courts in Canada, as well as competition officials, “look very closely at monopolistic or near-monopolistic positions in Canada.
WestJet and Air Canada together control more than 80 per cent of the domestic market.
The two airlines, Merchant said, “control almost the entire industry.
“We’re a large country. You either take a plane or go by dogsled, so they’re in control and the courts look at that issue,” he said.
In this case, Merchant said he doesn’t have to actually prove that the airlines ‘talked to each other or they agreed.”
Instead, he says, “When you’re in a monopolistic position, if you’ve essentially just followed the price in the way that they did, and there was some pre-planning, that ought to be sufficient.”
The proposed lawsuit also claims that the bag charge was an unfair financial benefit to the two companies, because it provides no extra service for the passengers.
The class action would include all Canadian passengers who paid the fees while taking domestic or U.S. flights after Oct. 29, 2014.
In a statement to CTV News, WestJet said they will speak through their court documents. Air Canada said they are not able to comment because the matter is before the courts.
The proposed class action must still be certified by a judge in order to move forward as a lawsuit.
Passenger rights advocates say it’s possible, in a free market, that the two airlines were simply competing to match the market.
“Has there been a kind of price-fixing that they agreed to do at the same time? I don’t know,” said passenger right advocate Gabor Lukacs. “The real issue is a lack of competition.”
More competition would drive airlines to advertise the full price, but then offer discounts to passengers who opt out of taking luggage along on their flight.
In a similar lawsuit in the U.S., where airlines were charging baggage fees for years before Canada was, a judge ruled there was enough substance to the claims to certify a class action against Delta Air Lines and AirTran Airways.
Since 2007, U.S. carriers have collected US$26.2 billion in baggage fees.