Controversial Move To Fight Rising Fuel Prices May Force Canadians To Roads

Canadians will be noticing some significant price increases for air travel as Air Canada this week quietly began adding a fuel surcharge on flights within North America.

As much as $120 may be added to any round trip ticket price as the national carrier fights rising fuel costs. The new surcharges of $20, $40 and $60 will be put on every one-way ticket flying within Canada and the United States in three categories: short-haul flights under 300 miles, 300 to 1000 mile medium range flights, and long-haul flights beyond 1000 miles.

The Ottawa Citizen reported a national consumers group said Friday that the announcement by Air Canada will surely affect how often Canadians fly. "This is a significant increase," said Mel Fruit, vice-president of the Consumer Association of Canada to the Citizen. "Canadians will now think let's drive instead of flying or not go at all."

Though understanding gas prices in the country are spiking, Fruit said he disagrees with the way Air Canada is handling the shortfall.

"We're getting very annoyed that airlines treat their customers with contempt," he said. "It's misleading that the ticket price means absolutely nothing now with all these surcharges and fees. This has been going on for so long. This is the breaking point."

Peter Fitzpatrick, a spokesman with Air Canada, said fuel usage is the largest expense Air Canada has and though the airline had been debating for a long time on adding the extra fuel surcharge, they felt like there was no other choice.

The airline states their jet fuel costs increased by 78 percent in the past year. On Thursday, Air Canada reported a $288 million loss in the first quarter alone, mainly because of the added cost of fuel.

"We are feeling the pressure of rising gas prices like every business," he said. "It's a decision we didn't take lightly. Even with this new fee, we are not recouping the full added cost of fuel."

Fitzpatrick said the company spent $2.5 billion on fuel last year, and has tried many operational methods to save on gas.

The fee is listed on tickets as a line item prior to purchase and is not reflected in advertised prices for travel. The idea of adding the cost of fuel into advertised prices was rejected due to prices changing too quickly.

The surcharge allows the airline to respond to higher or lower prices by altering the level of the fee.

When booking their tickets online, passengers may not immediately identify the added cost. The fee is hidden within a line that simply says "NavCan and surcharges" that is only broken down if the user clicks on it.

The Canadian Transportation Agency says there are no regulations that would force airlines to disclose the surcharge as part of their advertised price.

Fuel surcharges are becoming a common mechanism for airlines trying to recoup rising fuel costs. Most airlines, including Air Canada, already have the added tariff on international routes outside of North America. All major US carriers increased their surcharge this week on North American flights, with an added cost of $65 each way on some flights.

Fitzpatrick said Air Canada, with 1300 domestic, transborder and international flights each day, feels the added cost to passengers will not affect business.

"We have put some fare increases into effect and this hasn't diminished bookings," he said. "People understand because they're filling up their cars. They know about the high cost of fuel but they do like to travel. Even with the new surcharge, it is still reasonable to fly in Canada and the United States."

FMI: www.aircanada.com, www.navcanada.ca