‘Predatory monopoly’: Canadian North, feds criticized over new baggage fees

Nick Murray · CBC News

· Posted: May 29, 2024 4:00 AM EDT | Last Updated: 7 hours ago

Canadian North and the federal government are facing criticism over major changes to the airline’s baggage rates, effective on tickets booked as of Wednesday. 

Two weeks ago, the airline unveiled sweeping changes and increased costs. While passengers still receive their first bag for free, the cost of a second bag on the lowest ticket fare has jumped by 50 per cent, and the cost of an overweight bag (anything over 51 pounds) has tripled on all fare types.

“Because we have such a heavy reliance on airlines for transportation and cargo most of the year, it’s a staggering impact on the cost of living,” said former Nunavut senator Dennis Patterson.

“It’s well known that people always [maximize] their baggage allowances. And so to hit people who are bringing up essential goods that they can’t otherwise get in the North when they’re travelling from southern Canada is punitive. It’s really punishing.”

Iqaluit resident Nicole Jackson echoed Patterson’s concerns. She said while the changes don’t affect her so much, people from smaller communities will be hit hard bringing goods up from the capital — particularly after Canada Post closed a loophole last month many communities were exploiting to gain access to Amazon’s free shipping.

“So this greatly affects them when they’re travelling, if they can bring some things that they need back home,” Jackson said.

“Having to pay that extra baggage fee, I mean, it’s tough. Like, folks just can’t afford it.”

Feds to blame, says Patterson

This appears to be the second time Canadian North has increased baggage rates since its merger with First Air in 2019 — based on a CBC News analysis using archived web pages from the Internet Archive, a non-profit digital library. The last time the airline raised its baggage prices was May 1, 2023.

The now $86.25 fee for a second bag represents a 114.29 per cent increase since April 2023, and the $172.50 it costs for a bag weighing 51 pounds represents a 500 per cent jump since then.

The changes also mean customers can check in a maximum of three bags at the counter. All other bags will have to travel in cargo. 

Second and third bags will also travel standby and, if the aircraft is full, will be sent on a different flight when there is space available, the airline stated in an updated baggage policy on its website. 

“This was entirely predictable and can be blamed on, firstly the federal government,” Patterson said, referring to Transport Canada’s approval last year of revised terms and conditions to the First Air merger. At the time, Patterson described the approval as “totally shocking.”

“Conditions were put in place to protect consumers from this kind of predatory monopoly.”

The new conditions allowed Canadian North to hike passenger and cargo rates by up to 25 per cent per year, whereas under the previous merger conditions fares were locked in for seven years beyond those related to operating costs.

It also allowed the airline to earn a 10 per cent profit, on top of allowing the company to recoup past losses.

According to documents obtained by CBC News through access to information legislation, those losses amounted to $32.2 million at the time.

But ancillary fees, including baggage fees, have never been covered by the merger terms and conditions, according to a statement from Transport Canada. The federal government refused CBC’s requests for an interview on this story.

“From the airline’s perspective, these kind of ancillary fees are a major, major source of revenue for the airlines,” said Gabor Lukacs, an air passenger rights advocate based in Halifax.

“Ultimately it is not illegal, per se. They can charge as much as they want.”

According to the Order in Council formalizing the new agreement at the time, Canadian North said it “could not continue to maintain service in the face of ongoing losses, and that a full cessation of services was likely to occur in the immediate future.”

“The airline is jumping at the chance to increase revenues from their biggest customer base in Nunavut. And we have no voice and we’re not consulted in that exploitative situation that’s been created by the federal government,” Patterson said.

How Canadian North stacks up: an analysis

Canadian North refused to answer questions in an interview, instead sending a written statement.

“This change comes in direct response to customer requests. We are prioritizing safety, efficiency and passenger convenience, and our goal is to right-size the amount of checked baggage we are carrying in relation to our actual aircraft capacity,” spokesperson Trevor Wilde wrote in response to CBC’s request for an interview.

It’s unclear exactly what customers had been requesting, though Wilde noted the changes will help ensure customers and their bags arrive together. 

“Similar changes have recently been implemented by most, if not all other airlines in Canada, reflecting a collective response to the changing landscape of air travel and passenger needs,” Wilde continued. 

Wilde concluded his statement encouraging CBC News to research those changes and report on the findings.

CBC News conducted an analysis of baggage fees for most of Canada’s major domestic airlines, along with other operators in the North.

The analysis found that while Canadian North was among the few airlines to offer a free first checked bag for its lowest ticket fare, its additional fees are the highest among the airlines surveyed. The analysis did not look at comparisons in the cost of a plane ticket between the airlines.

CBC also analyzed trends in airline baggage fees since 2019 and found there were generally no substantial changes with the lowest available cost for bags among the airlines surveyed.

In a statement to CBC News, Air Canada said it increased its baggage fees in February 2024. WestJet’s increases in February 2024 were minimal. 

The only exceptions include Porter, which hiked the cost of a first bag by 45 per cent since 2022, and Calm Air which back in 2020 used to offer two or three checked bags for free depending on the route.

‘A fine balance’

Nunavut Transportation Minister David Akeeagok said the airline notified the territorial government earlier on the day of the announcement.

While Akeeagok acknowledged the changes do away with allowances Nunavummiut have become accustomed to, he said the airline has struggled with weight and balance issues with people checking in so many bags.

“That’s a fine balance that Canadian North has done, and I think that it’s been years coming. But it’s here now and it’s reality because you either bump your baggage or bump your passengers,” Akeeagok said, adding he didn’t push back against the changes before they were announced.

“Those are the critical operational decisions Canadian North needs to make. And increasing fees is one way of just discouraging [people from] adding on more baggage.”

Akeeagok said the government’s medical travel contract still allows for two checked bags for free.