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03/05/2018 09:01 EST | Updated 04/20/2018 16:49 EDT

"Basic Economy" Fares Are Coming To Canada. Here's What To Know

Last year, a brand new subcategory took the United States by storm: the "Basic Economy" fare class, which is cheaper than the regular economy class.

Canada is one of the most expensive countries in the world in terms of plane ticket prices.

That being said, in 2018 things should get much better for budget travelers, mainly thanks to the long overdue arrival of Ultra Low-Cost Carriers in Canada, and the arrival of the "Basic Economy" fares. Air Canada announced the launch of this new "Basic Economy" fare class last week, while WestJet was quick to follow suit.

Unfortunately, not everything about the announcement is positive.

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What's the "Basic Economy" fare class?

On a plane, there are usually four major types of seat classes: "First," "Business," "Premium Economy" and "Economy." The vast majority of seats on airplanes are in Economy, and this is obviously where you'll find the best prices.

Last year, a brand new subcategory took the United States by storm: the "Basic Economy" fare class, which is cheaper than the regular economy class. These seats are not in new separate rows, but rather just have additional restrictions: only the seat and a small bag are included in the price, everything else is optional for a fee.

This is great news in theory, because I'm a fan of letting consumers choose what they want to pay for when they fly. This is logical for the airlines too, because they are already experts in customer segmentation: out of 200 seats, passengers have paid around 100 different prices for their ticket.

Why this might be bad news

Although the concept is great, and travelers should always have more choices, there is a risk.

In the U.S., most observers (myself included) have noted that the prices on the three airlines that launched "Basic Economy" haven't really dropped that much; they've simply taken their lowest fare and restricted what's included, charging more for what was previously free.

So, the current "Economy Tango" price (Air Canada's cheapest) and the "Econo"price (WestJet's cheapest) could simply remain the lowest price available, but would now be under the Economy Basic name and therefore be more restricted. However, Air Canadaseems to be at least marketing it all as lower prices, so let's be (cautiously) optimistic.

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That being said, Air Canada is great at a lot of things (they have the widest choice of routes and are the top-rated airline in North America by Skytrax), buthaving low prices is usually not one of them.

AndWestJetis moving upmarket and trying to become a global airline to compete with Air Canada, so it will be interesting to see the actual effect on their fares as well.

Only time will tell if it really translates into lower fares for Canadian travelers, or if we'll need to go toward the new Ultra Low-Cost Carriers coming soon (including WestJet's own Swoop, startup Jetlines and active ULCC Flair Air.)

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