Here’s the good news: Airfares have declined in Canada. The bad news? You might wind up paying more in added fees.
WestJet and several U.S. airlines recently hiked their checked-bag charges. Discount carrier Flair Airlines has raised some other fees, and added a surcharge when customers pay for their flight with a credit card.
Airlines often say they “unbundle” fares so customers only have to pay for the add-ons they want.
“We keep our fares as low as possible while giving you the flexibility to add additional services,” Flair declares on its website.
But some industry experts warn that if passengers aren’t careful, they may wind up paying far more than anticipated.
Airlines “absolutely entice you with the low cost of the ticket … but then that low price is not as low as it appears with the ancillary fees,” said Karl Moore, an associate professor at McGill University who studies the industry.
Passengers might “get caught with another $100 in fees they weren’t expecting, which means profits for the airlines,” he said.
McGill University’s Karl Moore says air passengers might wind up paying more than they bargained for when booking flights with added fees. (CBC)
According to Statistics Canada, airfares dropped 14.3 per cent in 2023. Conversely, in the previous year, airfares spiked by 13.7 per cent.
As airfares declined, WestJet introduced two checked-bag price hikes. The airline now charges an extra $5 for checked luggage for travel booked after Feb. 14. That means, for an economy fare purchased online, passengers will pay between $35 and $42 for the first checked bag and between $55 and $65 for the second.
The higher fees may irk passengers already struggling with other rising costs, such as food and housing.
“It’s just a clear cash grab,” said Taryn Zielke of Regina who flies WestJet a couple of times a year.
Customer Taryn Zielke of Regina, left, questions why WestJet needs to raise checked-bag fees. (Submitted by Taryn Zielke)
“Did you have to raise the baggage fees by $5? Like, could you have not done that?” she said. “Probably not. But they did, because they could.”
WestJet spokesperson Julia Brunet told CBC News in an email that baggage fees allow the airline to “keep base fares lower for all travellers.”
She said the system-wide $5 hike is WestJet’s first since 2018, and that passengers can avoid baggage charges by paying for their flight with a WestJet RBC Mastercard, or by buying a pricier, flexible fare.
Will Air Canada hike baggage fees?
Several airlines in the United States have also hiked their baggage fees, including American Airlines and Alaska Airlines which upped their first checked-bag charge from $30 to $35 US. American did not provide a reason.
Alaska Airlines said in an email it needed to adjust its fees to “navigate rising operating costs – including high fuel prices.”
“I would not be surprised if they did. It’s very, very tempting to them indeed,” he said.
In an email to CBC News, Air Canada spokesperson Peter Fitzpatrick would only say the airline is “aware of these trends” and has made no recent changes to its baggage policies.
WATCH | Lynx Air ceases operations:
Lynx Air to cease operations Monday, but some passengers already stranded
3 days ago
Duration 1:50
Low-cost airline Lynx Air says it will cease operations as of Monday, but travellers are already being impacted as some flights have been cancelled. It is the latest discount airline that has been unable to stay in business in Canada.
Flair Airlines also recently raised some fees. Through an internet archive search, CBC News discovered that sometime after June 8, the airline increased the charge to book or change a flight over the phone from $15 to $25.
The airline also upped its flight change and cancellation fees. For example, the price to change a flight a week or more before departure has jumped 155 per cent to $74 from $29.
Flair also added a processing fee of 1.4 to 2.0 per cent when passengers pay by credit card. The airline did not respond to requests for comment.
Ottawa-based travel blogger, Anshul Singh worries that with all the added fees, it will be difficult for travellers to compare airfares and get the best deal. (Submitted by Anshul Singh)
Anshul Singh, founder of travel and loyalty-program website Points, Miles and Bling, says he applauds the airlines for being upfront about their fees, which are clearly laid out on their websites.
“Unbundled pricing models bring a lot of flexibility and predictability for passengers that know exactly what they’re looking for,” he said.
However, says Singh, the plethora of added charges makes it hard for passengers to shop around and ensure they’re getting the best deal.
“Often, those add-on fees are not readily available up front, especially when you’re comparing pricing,” he said. “I think it’s quite unfair to expect the customers to sort of keep a handle on all of these fee changes and make sure that they’re doing their price comparisons in a rational way.”
Moore said the best way for passengers to ensure they’re getting the best deal is to avoid paying for upgrades. So he recommends packing your own food, and travelling only with a carry-on bag. However, if you’re flying a discount airline such as Flair, you will be charged for any carry-on that can’t fit under the seat.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
