Devaluation of Latitude Fares on Air Canada – Impact on Upgrades

Unfortunately, there has been a devaluation of Latitude fares with Air Canada for international travel. Air Canada, have also, simultaneously started offering Comfort fares as well, which is coming at a similar price point to the older Latitude fares.

I started seeing hints of this a few weeks ago, and it is still trickling down to the reservation systems, however, what I am witnessing is not pretty. At all.

I bumped across this as I routinely used to book customers on Air Canada Latitude fares with the intent of securing advanced upgrades. I am a full service travel agent who helps people with their end-to-end itinerary planning, hence this will hurt many of my clients who have become used to taking advantage of this trick for securing cheap upgrades.

What is a Latitude Fare?

Air Canada has five categories of fares for travel within North America; Basic, Standard, Flex, Comfort and Latitude.

Up until very recently, Air Canada only had up to four categories of fares for international travel; Basic, Standard, Flex and Latitude. Now, Air Canada has launched a fifth fare category, the Comfort fare, which aligns all their fare categories across the entire Air Canada network.

Between all the five buckets, the differences were:

• Refundability
• Changes
• Same Day Airport Change
• Same Day Airport Standby
• Aeroplan Points
• Status Qualifying Miles
• Status Qualifying Dollars
• Priority Check-in service
• Priority Baggage
• Maple Leaf Lounge access fee
• Seat Selection

The difference between Flex and Latitude fares, within the international market were quite drastic. The main difference was that Flex tickets had to pay for a refund or change, and they could only select standard seats for free. With Latitude, the ticket was fully refundable and customers could select preferred seating for all flights. One major difference was how these tickets could be used as upgrades into Signature Class with E-Upgrade credits. Flex fares typically required 15 to 23 E-Upgrade credits alongside a co-pay of $500 per person. Latitude fares would typically only require 11 to 13 E-Upgrade credits without any co-pay.

With the launch of Comfort Fares in the international market, Air Canada now has a second fare option that is fully refundable and changeable with complimentary preferred seat selection. The differences between Latitude and Comfort are very marginal, other than using E-Upgrade credits. Comfort fares require between 12 and 20 E-Upgrade credits with a co-pay of $200. This is slightly more E-Upgrade credits for Comfort than Latitude, but more importantly, Comfort fares will only clear up to 7 days prior to departure for upgrades to Signature Class or Premium Economy Class.

What is the Fare Difference between Comfort and Latitude?

If I look back at ticketing history, a Latitude Fare between Vancouver and Delhi was about $2,500 one way.

What is the Latitude fare to Delhi? The fare is $3,754. About 50% more than the older Latitude fares. Comfort fares alongside the E-Upgrade credits are around the same price as the old Latitude fare.

This Devaluation is Still In Progress

Why am I confident that things are going to get progressively worse? When looking at flights from Vancouver to Dubai on my mobile, Latitude fares are $2,056. Comfort fares are $4,445.

The fact that Comfort fare is so much more than Latitude was a common theme about two weeks preceding the changes made for the Delhi flight. I believe what we are looking at is the new latitude pricing to Dubai that will soon take effect.

Why is the devaluation of latitude fares a big deal?

I posted about how I used my Air Canada Annual Worldwide Companion Pass to secure a great deal on Business Class from Seattle to Delhi. The value proposition of the Latitude fare + Annual Worldwide Companion Pass has dropped significantly. A round trip ticket, Vancouver to Delhi, in conjunction with an Annual Worldwide Companion Pass in Latitude for two people is now approximately $7,600. This is an increase of about 16% for round trip travel. For one-way travel, it is significantly more.

Granted, the impact of round trip travel is not as drastic as one-way travel, this is definitely a devaluation for those who got a liking to use Latitude fares with complimentary upgrades to Business Class.

What’s interesting?

What is interesting is that Premium Economy flex has not increased in price at the same proportion. To me, this is a direct price on increase on two types of consumers:

1. Those who can only buy Economy Class, even if Premium Economy Class is cheaper. Some corporates do this, which is, penny wise and pound foolish.
2. Those who use a companion pass.

For all other practical purposes, I cannot imagine anyone else who is harmed. If anything, this is actually a beneficial move for the in-frequent once a year, traveler, rather than a frequent flyer who might be more loyal to Air Canada.

Conclusion

There is no doubt that a devaluation is in progress for Latitude fares on Air Canada on their international network. The complete effects are yet to be seen, but if Delhi is an indicator to the overall trend, I would be getting very concerned.