Most Canadian airlines continue to tack on extra fees — sometimes hundreds of dollars — for jet fuel, even after North American oil prices dropped by more than 30 per cent in less than a month. Some industry watchers say the increased fares are likely here to stay for now.
Airlines Hold Firm on Surcharges
“Airlines obviously want to have the lowest fares that they can just to compete,” Chris Murray, an analyst with ATB Cormark Capital Markets, said in an interview. “But at the same time, they have to cover their costs.”
In North America, the cost of jet fuel remains about 32 per cent higher than last year, according to data from the International Air Transport Association. Last week, global jet fuel prices fell sharply on the back of a potential peace deal in the Middle East that allowed energy to flow again through the Strait of Hormuz.
“As the price of fuel comes down, (airlines) will bring fares down accordingly,” Murray said, stopping short of putting a specific timeline on that drop.
Fuel Surcharges Persist
Many airlines across Canada imposed fuel surcharges and began hiking fares when oil spiked earlier this year. In May, WestJet Airlines Ltd. chief executive Alexis von Hoensbroech said the country’s second-largest player wasn’t done lifting rates.
The Financial Post, in collaboration with the Calgary Herald, examined several domestic and international flights and found no evidence that airlines have removed surcharges from ticket prices — though some are dialing them back.
WestJet Reduces Some Fees
In an emailed statement, WestJet said it reduced fees on some tickets. The company said its fuel surcharge on companion vouchers — a perk for WestJet credit-card holders — will drop from $60 to $40 per round-trip or one-way fare. Surcharges remain in place for other fares.
“This adjustment reflects a recent movement in fuel costs and the airline’s ongoing effort to balance affordability with the realities of the current operating environment,” a WestJet spokesperson wrote, noting surcharges could go down — or up again — depending on fuel prices.
Porter Airlines Cuts Fee for Rewards Travelers
Toronto-based Porter Airlines Ltd. said it never implemented a surcharge on standard flight bookings; instead, the carrier applied an extra levy to those paying with rewards points, a small number of travellers. On Tuesday, Porter cut the fee for those travellers in half — down to $20 — even while jet fuel prices remain higher than last year.
“This was always intended to be a temporary measure, so we are fulfilling our promise by moving toward removing the fee entirely,” a Porter spokesperson said in an email, adding the airline would make more adjustments if conditions change.
Impact on Travelers
Customers flying with many of Canada’s carriers still have to dole out extra — sometimes hundreds of dollars more — mostly due to sky-high fuel costs. With strong travel demand pushing ticket prices upward, analysts expect the added levies to remain for the foreseeable future.
