Canada's airlines move to all-in ad pricing
The Canadian Press
Published Wednesday, February 8, 2012 10:02PM EST
MONTREAL - Canada's largest airlines have all launched all-inclusive pricing efforts that make it easier for passengers to determine the actual cost of flying.
Air Canada began on Wednesday to advertise prices that show the final cost of a ticket by combining the extra charges that have been left out in the past.
Porter Airlines, which flies regional planes mainly from its base at Toronto City Centre airport said it would begin to advertise the total cost of a flight on Friday.
They join WestJet Airlines (TSX:WJA) which began to advertise all-in fares in January.
The new pricing structure will factor in all of the fees, surcharges and taxes that customers wind up paying, which in some cases can virtually double the posted price of airline tickets.
The extra amounts include Nav Canada fees, airport improvement charges, fuel surcharges, insurance and air security charges.
Consumers also have to add taxes -- GST or Harmonized Sales Tax, and possibly sales tax or other taxes depending on the province or country.
Canada's largest carrier (TSX:AC.B) launched its new all-in fare policy as it unveiled a seat sale marking its 75th anniversary.
"Our all-in price advertising initiative is a response to our customers' increased desire for transparency and simplicity when shopping for air fares," said Air Canada marketing vice-president Craig Landry.
Air Canada's new all-in price will be displayed on its website, email specials, online and print advertising.
Large newspaper ads on Wednesday, for example, showed a flight from Montreal to London costing $887, with the base fare starting at $244 and $643 in additional charges.
Final prices may vary by routing and individual options such as baggage fees.
The changes come ahead of laws requiring more honest airfare ads expected later this year.
Robert Kokonis, president of airline consulting firm AirTrav Inc., said the carriers didn't want to wait until the Christmas deadline.
"I think they wanted to get it over with and also position themselves in front of the consumers' eyes as doing the right thing," he said in an interview.
Calgary-based WestJet changed its print advertising in January, but bookings on its website and that of Air Canada don't at first glance show all-in prices.
"We are still working out some technical details to be able to display all-in pricing within our booking engine, which we expect will happen later this year," said spokesman Robert Palmer.
Passengers initially see only the base fare when choosing flight times. But they can see the all-in price and breakdown of extra charges by clicking the price associated with individual flights.
Unlike the other carriers, Porter will only show one price without highlighting fees and taxes separately, said president Robert Deluce.
"We've been able to change what passengers expect from an airline by introducing standard premium amenities and affordable flights. Now, we're extending this experience to the booking process, making it easy to immediately understand how much a flight costs by showing one number."
Air Transat, which flies to the Caribbean, Mexico, Europe and the Mediterranean, has traditionally included all-in fares for its flights and package holiday and advocated such pricing for years.
"It's interesting to see the change of heart of those who just very recently saw the light," Transat spokeswoman Debbie Cabana wrote in an email.
The advertising changes are coming after the Conservative government announced in December new rules that will require Canadian airlines to include all fees and taxes in their advertised prices.
The Canadian Transportation Agency is consulting various stakeholders before drafting new regulations. They will need to figure out how the rules can be crafted so Canadian airlines are not put at a disadvantage