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02/04/2014 09:00 EST

WestJet Mulls Baggage Fees As Canadian Dollar Falls, Air Fares Rise

CP

A tumbling loonie and rising air fare have created something of a double whammy for Canadian airline passengers as of late, and now, more fees could be on the horizon.

On Tuesday, WestJet announced it has since increased the cost of airfare with a “system-wide” two per cent hike. The airline has not ruled out a future fee on checked baggage.

CEO Gregg Saretsky said the move would bring the airline in line with carriers in the United States who have been charging customers for checked luggage without much backlash.

All our competitors on trans-border are operating with load factors similar to ours. It’s hard to see that we’re getting any advantage in the market by not charging for a bag,” he said in a conference call to investors.

Saretsky stresses WestJet would pursue more baggage fees if no other options are available.

"If the IT team and our outside suppliers come back and can't deliver a solution that is commercially reasonable, feasible and competitive, we wouldn't go forward with implementing a first-bag fee," said Saretsky.

The airline currently charges a luggage fee for passengers with three or more pieces of checked luggage, according to the company's website. If it were to start charging for the first piece of checked luggage, it would need to set up a system to exempt V.I.P. customers, such as frequent fliers and loyalty credit card customers.

The idea comes as the Canadian dollar reaches a four-year low, leaving airlines like Air Transat, Sunwing and Air Canada Vacations to implement a $35 currency surcharge, since they operate in U.S. dollars, the Toronto Star reports.

Saretsky says WestJet won't budge on its stance against using a currency surcharge, a common way airlines compensate higher fuel prices and weak currencies.

“We don’t take price increases lightly,” Bob Cummings, executive vice-president of marketing and guest experience told Global News. “We’ve avoided price increases as much as possible.”

With Files From The Canadian Press

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