Air Canada offers extra service, for extra fees

A la carte ticket pricing—charging consumers for each and every service instead of including them in a single price—has become a fact of travel life in recent years. Even airlines that describe themselves as “full service” have begun charging more for meals, phone bookings, checking a second bag, and so on.

The practice was most fully developed by Ryanair, the Irish discounter that charges extra to use airport check-in facilities, to check bags, and to pay by credit card or debit card.

In North America, Air Canada has been the most aggressive in unbundling its services, with some cheaper tickets requiring add-on fees for advance seat selection, and optional frequent flyer miles and checked bags.

On one hand, as long as airlines communicate the extra charges fully and clearly, there’s nothing inherently underhanded about offering only basic air transportation in the published ticket price, and charging more for anything extra.

On the other hand, many travelers see the extra fees as part of the nickel-and-diming that airlines have been resorting to as a way of increasing revenues without appearing to raise prices.

The question: What services should be part of the basic travel product?

There’s no easy answer. But a recently introduced Air Canada service, On My Way, may go too far.

On My Way, according to the airline, is “Air Canada’s newest a la carte fare option, providing travel assistance service to protect you against unexpected travel expenditures—including any that apply to your air ticket investment—and offers you a smooth, stress-free travel experience when unplanned disruptions affect your travel plans.”

Specifically, by paying $25-$35 each way, depending on the distance of the flight, flyers receive the following in the event of a travel disruption:

• Rebooking the first available flight on Air Canada, Jazz or another airline
• Arranging complimentary hotel accommodation, car rental or other ground transportation and meals

In the great majority of cases, Air Canada will re-book affected passengers on an alternate Air Canada flight on the same day as the canceled flight. In fact, they will bend over backwards to do so, because redirecting a customer to another airline and picking up the tab for a hotel stay are very expensive options, to be avoided whenever possible.

So as a practical matter, very few On My Way customers will receive anything more than they would normally be entitled to. That calls the service’s value proposition into question.

Less obvious but perhaps more insidious, creating a second tier of customers who receive special consideration in the event of a travel disruption will almost certainly have the effect, intended or otherwise, of degrading the quality of the service delivered to the non-privileged group. Suddenly, delayed passengers who have not paid extra for enhanced service become second-class citizens, and their problems receive lower priority.

On My Way is likely to be a significant revenue-generator for Air Canada. For Air Canada’s customers, the benefits are less clear.

(Editor’s note: For a somewhat more approving take on Air Canada’s On My Way program, check out Contributing Editor Ed Perkin’s article A new kind of airline insurance.)