Air Canada cuts back on its fuel surcharges

CALGARY, Alberta, May 15 (Reuters) - Air Canada (ACa.TO: Quote, Profile, Research) has eased off a bit on fuel surcharges for flights in Canada and the United States after its main competitor announced smaller extra fees to cope with soaring jet fuel prices.

Air Canada, the country's biggest airline, will tack C$40 ($40) onto one-way ticket prices for flights between Canada and the United States, spokeswoman Angela Mah said.

For domestic flights, the fuel surcharge will be C$20, C$30, or C$45, depending on distance flown, Mah said.

Last week, Air Canada instituted charges of C$20, C$40 and C$60 for all North American flights, with oil prices hovering well above $120 a barrel.

Then on Monday, WestJet Airlines (WJA.TO: Quote, Profile, Research), the country's No. 2 carrier, said it was adding C$20-C$45 per one-way ticket.

"We continue to monitor the market to ensure that we remain competitive in every market that we serve," Mah said. "And like the cost of fuel, airfares and surcharges are expected to remain dynamic."

She said it was too early to determine if extra charges had dissuaded potential travelers from booking with Air Canada.

The airline said last week that fuel costs in the first quarter increased by C$130 million from the same period a year earlier as oil prices surged above $100 a barrel.

($1=$1.00 Canadian) (Reporting by Jeffrey Jones; editing by Renato Andrade)