Air Canada may hike fares, fees due to low dollar

Air Canada is considering new fees and fare increases to make up for a weaker Canadian dollar, Air Canada CEO Calin Rovinescu has told Bloomberg news service.

"There are going to be some revenue strategies and some cost strategies," Rovinescu said, without giving specifics of what increases the airline might be planning.

The news comes as Air Canada and WestJet both reported its flights were not as full in February 2014 compared to a year ago.

Air Canada has increased its capacity, as measured by available seat miles, by 4.9 per cent compared with February 2012, but passenger traffic increased 3.8 per cent. That gave it a load factor of 79 per cent, down from 79.8 per cent a year ago.

WestJet's load factor fell to 84.6 per cent from 86.1 per cent in February 2013. WestJet  has increased capacity by 9.2 per cent, while traffic increased by 7.3 per cent.

The numbers are considered a positive sign, given the cold weather which resulted in many cancelled flights and a late Easter, which moved many people's travel plans until later in the spring.

WestJet Airlines Ltd. cut its revenue expectations Friday due to softer domestic demand saying revenue will be flat to down slightly from the previous year.

The lower Canadian dollar has hurt both airlines as it raises the price of both jet fuel and new planes.

Montreal-based Air Canada has said its hedging on the U.S. greenback hasn't been enough to protect it from the increased costs.

Air Canada has already imposed a surcharge on vacation packages.

"There's no free lunch unfortunately, unless we can get the U.S. dollar to be more co-operative." Rovinescu told Bloomberg.

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