Air Canada to introduce premium seating on some flights

Air Canada will introduce premium economy seating on its new Boeing 777s next year and its 787 Dreamliners that will be delivered in 2012, sources tell Canada's National Post.

The country's largest carrier will offer the seating, which comes with more legroom, in economy cabins at prices lower than those charged for business class.

The National Post points out that Air Canada's domestic rival, WestJet Airlines, also plants to unveil premium economy seats next year.

According to The Star Phoenix in Canada, WestJet will offer 24 premium economy seats on each of its 100 planes and will include priority boarding and refundable tickets in the price.

The Post says WestJet is adding the seats while introducing a three-tiered fare structure that it expects to appeal to business travelers.

Walter Spracklin, RBC Capital Markets analyst, told the paper that he expects the highest tier of that structure to cost about 20% more than WestJet's base fares and include amenities such as the premium economy seats, free bag check-in, drinks and meals, and priority boarding.

The second tier would be less expensive but still allow for a free checked bag. Then there would be a "bare-bones" fare.

The structure could bring in more than $100 million in revenue a year for WestJet, he told the Post.

He expects Air Canada to adopt similar pricing.

Airlines have increasingly been adding premium economy seating to attract travelers who don't want to pay top dollar for first or business class but are willing to pay a little more for more legroom.