Good-bye carry-ons. Air Canada’s changes to basic fares will cost consumers more in 2025

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Air Canada AC-T passengers booking basic fares should get ready to pay more in 2025.

The airline announced Wednesday that starting Jan. 3, customers booking an economy basic fare will no longer be entitled to carry-on baggage. Only a single personal article – such as a backpack, purse or laptop bag – will be allowed when travelling to Canada, the U.S. (including Hawaii and Puerto Rico), Mexico, Central America and the Caribbean.

The move is certain to anger travellers but makes sense for Air Canada: WestJet and Porter already have basic fares and similar carry-on luggage policies. In theory, the change will also speed up the boarding process since fewer people will fight for overhead luggage space.

Checking a bag will cost $35 to $42 each way. For a single person, that may not be a big deal, but a family of four is looking at an additional cost of $280 to $336 for a round-trip vacation. Air Canada’s revenue is, of course, the biggest winner here.

The new rule only applies to economy basic tickets purchased on or after Jan. 3, 2025. The free personal item must not exceed the following measurements: 33 centimetres high, 16 centimetres deep and 43 centimetres wide, including all wheels and handles. If you’ve already booked a ticket with travel dates beyond Jan. 3, you’re still entitled to carry-on luggage and a personal item. Aeroplan elite status members still get free checked bags.

While the extra baggage costs are annoying, there’s an easy way to minimize the damage. The TD and CIBC Aeroplan Visa Infinite cards provide the primary cardholder and travelling companions (up to eight) their first checked bag free. Both cards have an annual fee of $139 and also include comprehensive travel insurance, which could save you a few hundred dollars. The American Express Aeroplan card offers similar benefits and has an annual fee of $120.

In addition, starting Jan. 21, 2025, customers purchasing a basic fare to all destinations will be assigned a complimentary seat at check-in, but a fee will apply if they want to change their seat. The cost of switching will depend on your chosen seat. For example, a window seat will cost more than a middle seat.

Air Canada introduced a similar seat change policy in April, but it applied to both basic and standard fares. Although an implementation date was not announced, customers were rightfully furious, so the airline backtracked almost immediately. The updated policy now only affects basic fares, which is more reasonable.

Family seating still applies, so anyone travelling with a child under the age of 14 is automatically seated close together at no extra charge. This new system will also prioritize seating travelling companions together. However, if you and a friend book separate tickets, don’t expect to sit beside each other unless one of you is willing to pay.

This change applies to your travel date, so if you have a basic fare and travel on or after Jan. 21, 2025, you must pay if you want a specific seat.

With the change to basic fares, customers should consider purchasing an Air Canada standard fare since it has more flexibility. You can bring a carry-on bag for free, change your date or cancel to a travel credit for a fee, earn Aeroplan points and change your seat at check-in at no additional cost. The difference between basic and standard fares within North America and sun destinations is about $25 to $50 each way. If you’re travelling further, such as to Europe or Asia, it’s about $100 in each direction.

It is disappointing that Air Canada has done away with carry-on baggage allowance for basic fares, but that seems to be the industry trend. On a positive note, with all three major airlines in Canada offering similar basic fares, travellers can easily compare prices. Of course, cost shouldn’t be your only consideration, as on board experience, convenience and loyalty program rewards matter too.

Barry Choi is a personal finance and travel expert at moneywehave.com. He was previously affiliated with Aeroplan, WestJet, American Express, CIBC and TD but currently has no relationship.