Cash-strapped Air Canada has been forced to change its policy to allow dogs and cats to travel in the cabin.
The Canadian national carrier, which is seeking immediate cash to avoid falling for bankruptcy, had in 2006 banned pets in the cabin over concerns about passenger health.
But, in a statement on Wednesday, the Montreal-based airline said it now will allow passengers to bring cats and small dogs in the cabin on its flights from July 1.
The struggling airline said it will charge $100 per pet on domestic flights and $200 on international flights.
Dogs and cats will be treated as a carry-on items that can be stowed under the seat, it said.
Two pets will be allowed on its smaller Jazz planes, and four on bigger Air Canada flights.
"This is the latest of our customer-friendly initiatives that underscores our renewed commitment to listening to our customers and offering a competitive product that meets their needs," Air Canada executive vice president Ben Smith said.
With Air Canada fast losing market to the private WestJet, Smith said: "We will continue to monitor the marketplace closely and make adjustments as necessary to ensure we maintain our competitive position."
The airline, which had to seek bankruptcy protection in 2003, is again facing hard choices and is seeking financing, including up to $300 million from the Canadian government to avoid another bankruptcy filing.
Air Canada is the world's thirteenth largest airline with operations to 170 destinations around the world.