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Canada's airlines move to all-in ad pricing

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Date: Wednesday Feb. 8, 2012 10:02 PM ET

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

Comments are now closed for this story

Name
said

Flying from canada is much to expensive. Two years ago my family and I booked a flight out of plattsburgh to florida. I paid $2600 for 4 people which included the flight with Alligiant airways, Hotel and tickets to Disney for 4 parks. I tried to book the same trip from montreal and the price was about $2800 without the disney tickets, that's because we pay to much taxes here in Quebec. By the way, the parking was free.


Alan in Halifax
said

That still doesn't change the over airline pricing during the holiday season. I flew from Halifax to Edmonton return for around $800.00 during the summer. My son flew from Edmonton for Halifax return for over $1,600.00 during Christmas!! Talk about gouging!!


Elizabeth
said

It wasn't really that hard in the first place to figure out that they were charging you through the roof, now you can just see that at first glance... Nothing has changed except the ability to see it immediately.


Dean in Abby
said

It's about time. Just be sure to show what the level of over-taxing is and who is doing the taxing. this way, we will all know who the real problem is. We are all so over-taxed o everything it's ridiculous. Let's see who and where it's all going.


Don
said

@Don K

I couldn't agree more with Don K... I'm surprised that people still fly in Canada as the prices are a total joke. How are these Airlines surviving? It has to be all businesses flying as they get to right off these rip-off prices... Fly south and at half the price and enjoy the heat....


John Lang
said

My attempt to purchase a ticket for US$318 from Tucson to Ottawa (via Chicago) on AA.com was thwarted because the .com website could not accept Cdn plastic. Turning to buy the same flights on AA.ca, I learned that the price had climbed to more than Cdn$720. I quickly borrowed a friend's US Visa card and went back to AA.com. I suppose the difference is comprised entirely of Cdn tax and that American Airlines agrees to collect it for CRA for any flights purchased with a Cdn credit card.


Prof. Pye Chartt
said

"'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." (Just a coincidence, of course. The legal requisite had nothing to do with the change.)


Jon
said

Why is this just happening. Truth in advertising anybody? Should have happened long ago.


John Lethbridge
said

So if you 'pick' a $179 flight from Calgary to London, Ontario on the Westjet website, it still works out to $242 after taxes. I don't really see what has changed..., except that the prices get higher everytime I look. We need Porter to fly further west.


phil
said

Well done West Jet, Porter and Air Canada for being honest and showing exactly what the real price is. It shows real courage to not hide the real price like the others who will try to sell more and decieve more people before the deadline arrives.


Shawn
said

as usual westjet leads the pack! I would never fly air canada if given the choice, even if it cost less. The service and guarantee of being looked after is simply not the same. I had a friend who flew home from halifax with me on a trip; he booked air canada and i booked westjet. The flights were both cancelled. He was told to rebook and that was it, look after yourself. I was given travel and meal vouchers, plus a hotel stay overnight. When I found out it would be 2 days before I could get home, i simply told them and they doubled the hotel and vouchers, no questions asked and no hassle. Viva Westjet!


bernie sinclair
said

Well it is about time. The misleading info in newspapers and online has been such a scam. Do these new prices include bagage fees? let's hope the auto dealers are next in line to clean up their misleading small print crap.


Toupie in Calgary
said

So the government has forced the airlines to hide the horrendous taxes charged on airfares. Frequently exceeding 100%. So like gasoline, beer, wine, alcohol and tobacco no one will know how much you're being gouged in taxes to pay gold plated pensions and other government waste.
A couple things in this country need to be taken to plebiscite. Starting with the rate of pay and pensions for politicians from indian chiefs to Prime Minister. Then a change to public declaration of all the governments covert tax grabs on all good and services. GST is just the tip of the iceberg. So health and financial hazard warnings on tobacco, gasoline pumps, beer, wine and alcohol.


Pippa Martins-St. Onge
said

I like this quote: "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."


Wilson
said

This is good news for the flying public... at least on the surface. Somehow, I get the feeling in the pit of my stomach that Air Canada is doing this in order to open the door to introduce other "hidden" fees that we will no see as they are buried in the overall price. No large corporation makes this kind of move unless they can financially benefit. To suggest they are doing this purely for the benefit of the consumer is self-dillusion of the highest order.


irma1957
said

...and it took how many years for this to happen??


Manitoba Dave
said

This whole thing really annoys me. If you look at what the "other" fees are, wtih the exception of fuel surcharges, they are ALL taxes. When the government came out with its mandated "honest" fares I laughed. It's a joke! This is government's way of being dishonest and legislating an industry to hide taxes. It is NOT right. While I understand the confusion for passengers, the same thing will happen to the airline industry as has happened to retailer in Canada the last few years with the American dollar parity. Consumers will cry that the airlines in Canada are "ripping" them off, like they do to Canadian retailers, when retailers in Canada have a higher cost structure due to many tariffs and government mandated programs that the Canadian retailer has to just pay. It gives the perception that retailers in Canada have higher prices cause they are "gouging" customers. The airline industry is one of the MOST TAXED industries in Canada. Airport fees, NAVCanada fees, landing fees, fuel surtax fees on Avgas, are all taxes that the government wants to hide. This whole thing....just smells really really bad! Shame on our governments for being such cowards.


John from Edmonton
said

Finally, it is about time the Airlines start showing transparency rather then trying to suck clients in with bogus leader prices! That may have worked for a while but after so long with it,... people are frustrated to the point where they will stop there search on any non required trips. Yes we do want transparency. Now the only thing we have to do is add taxes on top, but that is straightforward and easy to figure out, so no problem doing that!


La Velle
said

Bravo! It is about time!



Ottawa
said

No only if they can lower the price of flying to make it more cost effective for everyone to fly within Canada!!!! Trying to book a flight to Victoria BC in August and return its $642!!! That is alot of money. I hope something gets regulated soon because I can not afford to travel via Air.


Terry Wasik
said

it is about time ! in this day and age of the 21st century and internet ability.
Travellers are going to shop around for the best price and service anyways. You better get with the program and list your best price and service.
Who says transparency is not a good thing.
cheers from Cornwall,ontario Canada (where we need a good airport as well )
bon voyage


Keefer
said

Honesty in advertising? That's like asking for politicians to follow through with their campaign promises.


Flyer
said

Seems to me that the Government should be advertising the flights instead of Air Canada:Montreal to London - $643** Plus $244 Air Canada fee


ACFLYER
said

LOL, I noticed all of a sudden WESTJET changed their fares too. Kudos to Air Canada for being a leader!


John
said

Good! All airlines and travel agents should do this now.


Saki S
said

It's about time!


Ktbay
said

It's about time. This is done in the US. But..."prices look more like final cost" ???? Still leaves room for a little something extra to be tossed in at the end.Why not just the exact cost.


RS
said

Its about time.The article is mistaken. Fees/taxes are often more than double the airfare. I recall this when i purchased a $24 ticket from Ottawa to Toronto.


Brett
said

As an regular traveller, this will be a nice change.


Jolynn
said

It's about time!


TravelYYC
said

I dont see how this will help as different airport taxes and fuel surcharges are always changing every day. Plus that fact that there are only so many seats at "that Price"


Don K
said

Double the price? Try 4 times the price in some cases.... This is why I stopped flying anywhere in Canada; WAY too expensive, bad service and all the hidden fees. Hard to justify paying $1500.00 for two people to fly to Halifax and pay only about $700 to fly to florida if you drive to Buffalo. No wonder more Canadians don't travel within Canada.


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