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A proposed class action lawsuit against Air Canada and WestJet claims the companies “colluded” when they announced checked baggage fees in 2014.
Both airlines introduced a $25 checked luggage charge within days of each other – WestJet first on Sept. 15, 2014 and Air Canada on Sept. 18, 2014.
The Merchant Law Group in Regina filed the suit. Lawyer Tony Merchant said part of the issue is the companies didn’t add any value for the fee.
“You can’t sell something for a much bigger price…when you’re not really adding anything to the product, and that’s what they did. They decided we always have taken bags, it was part of the ticket price, now we’ll add a big chunk on that ticket price,” he said.
The fee was for only economy passengers flying domestic or to the United States for WestJet. Air Canada wanted economy passengers flying domestic, to the United States, Caribbean and Mexico to foot the bill for their bag.
The airlines ‘colluded’
The companies would have had to coordinate to impose the fees so close to each other, according to the statement of claim filed by the Merchant Law Group.
“Air Canada was ready to implement the same type of fee on its system by its staff only three days after WestJet’s announcement,” it reads. “[This] would have been impossible to coordinate for Air Canada. The announcement within three days indicates collusion.”
Part of the issue is that if the airlines did collude, then there was a disadvantage for consumers because of the lack of competition.
“If you live in Regina and you have to get to Toronto or Montreal you either fly or go by dog team. So it’s just not possible for people to say well I won’t use your service, I’ll use a competitor,” said Merchant.
What the fee really means
Merchant said the $25 fee would be a huge addition to the airlines’ budgets.
“The airline is getting less than 50 per cent of the money that you pay,” Merchant said.
“Twenty-five dollars is often a 25 per cent increase, sometimes it’s even a 30 per cent increase. So this was a huge addition and it has shown up in the bottom line with both WestJet and Air Canada doing much better, really fabulously well financially. We think the courts will hold that this is anti-competitive and not permitted.”
Anybody who has paid the $25 fee since Oct. 29, 2014 would be able to jump on the class action lawsuit to get their money back.
Merchant hopes the class action lawsuit would become certified in the next seven or eight months.
