Air Canada adds new bag fee, following WestJet

TORONTO (Reuters) - Air Canada said on Thursday it will start charging some economy passengers for their first checked bag on flights within Canada and to the Caribbean and Mexico, days after rival WestJet Airlines Ltd introduced a similar fee. The new C$25 ($22.73) fee will be paid by customers flying with Air Canada's cheapest economy tickets, and the airline said it expects the change will affect about one in five passengers on domestic flights, or about five percent of its overall customers. WestJet introduced a first bag fee for the first time on Monday, for so-called "Econo" bookings within Canada and between Canada and the United States. Other international flights, including Mexico an the Caribbean, are exempt. Air Canada had charged some economy passengers for their first checked bag on flights between Canada and the United States since 2011, but there was no similar fee on domestic flights. The shares of both airlines rose on Monday, as analysts said Air Canada would likely add a fee on domestic flights. Charges linked to baggage, advance seat selection and other options have boosted carriers' revenue in recent years. Air Canada's new fee will apply to bookings made on Thursday and later, for travel on or after Nov 2. (1 U.S. dollar = 1.1000 Canadian dollar) (Reporting by Allison Martell; Editing by Jeffrey Benkoe)