Air Canada Adds Basic Fares in Premium Economy and Business Class

Air Canada has introduced two new premium fare categories: Premium Economy Basic and Business Class Basic.

The new fares retain the same seat, onboard meal, carry-on bag, and priority airport services, but remove some benefits that travellers have traditionally received with a premium cabin ticket. Air Canada says the fares will be priced below its existing premium options, while its current Premium Economy and Business Class fare brands will be renamed Standard and Latitude.

Air Canada also explicitly frames the change as part of a broader industry shift, noting that “demand for premium travel continues to grow and this change aligns with our partners and industry trends.”

Note this applies only to cash tickets and award tickets stay the same. Currently, award tickets are offered in Standard and Latitude, with the latter allowing for free changes and cancellations and Signature Suite access.

Air Canada introduces Basic Fares to Premium Economy and Business Class

What Do Air Canada’s New Basic Fares Include?

The new fares will initially be available on flights to the Caribbean, Mexico, Latin America, South America, and select transatlantic joint venture markets with United Airlines and Lufthansa Group. Iran, Israel, and the UAE are excluded. Domestic, transborder, and transpacific flights will not receive the new fares at launch.

Premium Economy Basic and Business Class Basic will earn one Aeroplan point per dollar spent on the base fare and carrier surcharges. Elite members will earn their usual 2x to 6x multiplier, depending on status.

Both fares will also earn 4 Status Qualifying Credits per dollar, the same rate as Air Canada’s other Premium Economy and Business Class fares. Most Elite Status and eligible Aeroplan credit card benefits will continue to apply, with the only exception being eUpgrades, which cannot be used with either Basic fare.

Not as Punitive as It Could Have Been

Premium cabin unbundling has become increasingly common across the airline industry, particularly in North America and Europe. Carriers such as United, Lufthansa, British Airways, and others have already introduced “Business Light” or similarly stripped-down premium fares on select routes.

In that context, Air Canada’s move is less of a departure and more of a catch-up. The airline is effectively aligning its fare structure with those of its joint venture partners and competitors, many of whom have already segmented premium cabins into multiple price tiers.

Premium cabin unbundling has become increasingly common, so it was probably inevitable that Air Canada would follow.

Still, Air Canada’s version is less restrictive than some competing Business Light fares. Business Class Basic passengers retain a carry-on bag, a checked bag, priority services, the full onboard Business Class experience, and Maple Leaf Lounge access. You’ll retain full Elite Status SQC earnings, with the biggest pain points being the inability to apply eUpgrades and the need to pay for seat selection.

Air Canada’s Business Class Basic is not as punitive as competitors’

By comparison, many premium basic fares elsewhere remove lounge access altogether, making the product feel far less like a premium ticket before a passenger even boards. Air Canada has also preserved Aeroplan earning, full SQC accrual, and status and credit card benefits.

Premium Economy Basic is more limited, particularly since it does not include lounge access. However, travellers with an eligible premium Aeroplan credit card or Elite Status may already receive lounge access or extra baggage through those benefits, reducing the real trade-offs.

The Real Question Is Whether Fares Actually Get Cheaper

The concern is not necessarily that Business Class Basic strips away too much. For travellers with fixed plans who do not care about advance seat selection, a second checked bag, or eUpgrades, it could be a perfectly reasonable fare.

The more important question is pricing.

As we discussed in our comparison of basic economy fares in Canada, a new Basic fare brand does not always create a genuinely cheaper way to travel. More often, it gives airlines another way to charge extra for benefits that were previously included in a standard ticket.

That could happen here as well. The fare that previously bought a regular Business Class ticket may now buy Business Class Basic, while travellers need to pay more for Standard or Latitude to receive the same benefits they had before.

Air Canada has not yet provided enough real-world pricing to know whether that will be the case. Once the fares are consistently loaded, we can compare historical pricing data with the current prices for Basic and Standard, although it is admittedly difficult in today’s environment of rising jet fuel costs.

Takeaway

Air Canada’s new Premium Economy Basic and Business Class Basic fares are another example of premium cabin unbundling, but they are not particularly punitive by industry standards.

Business Class Basic still offers a solid core experience, especially for travellers who already have Elite Status or an Aeroplan co-branded credit card. You’ll also accrue the same SQC and Aeroplan points as a regular business class fare for Elite Status purposes.

The bigger issue is whether Air Canada uses the new fare structure to make premium travel cheaper or simply makes the benefits passengers already enjoyed more expensive.

Featured Image Credit: Air Canada