A steep decline in Canadian travel to the U.S. has dealt a blow to airlines that usually cash in on popular Florida beach vacations and family trips to Disneyland.
That’s left airlines scrambling to adjust their summer schedules, trim U.S. flight capacity and add more seats to destinations within Canada and overseas.
WestJet, for example, says it has scaled back some capacity between Canada and the U.S. and shifted its summer schedule to redeploy aircraft to “markets of strength,” including Europe and sun destinations.
“The current political environment and differences in currency exchange rates are likely contributing to the shift in demand,” said WestJet spokesperson Josh Yeats.
Air Canada says that, as of mid-March, transborder bookings were down about 10 per cent for the next six-month period. The airline said it is adjusting some of its U.S. flights by using smaller aircraft and reducing certain frequencies.
Porter Airlines, which has significantly increased its service to the U.S. over the past year, has slightly reduced its summer service into the U.S. and shifted some capacity to domestic markets.
While airlines frequently tweak their schedules, it’s unusual to see such a significant dip in demand for Canada-U.S. travel, said Mike Arnot, a spokesperson for airline analytics firm Cirium.
“It’s a tough place for the airlines to be,” said Arnot.
Cirium analyzes data from third-party sources like travel agencies and booking websites, Arnot said. It found that summer bookings between major Canadian cities and popular U.S. destinations are down nearly 20 per cent compared to last year.
Conversely, bookings for the month of July between popular Canadian destinations are trending up by about 11 per cent compared to last year.
Arnot noted that because the data comes from third-party sites rather than directly from airlines — and not all airlines book through these sites — the analysis reflects overall trends rather than precise airline capacity.
At the Calgary International Airport, travellers told CBC News they’re steering clear of the U.S. this summer.
“We have family in the States that we won’t see for a while, or we’ll meet them elsewhere because we’re trying to put our dollars and cents elsewhere,” said Yael Staav, who was on her way back to Toronto after a weekend in Calgary.
Bruna Machado, en route to Brazil to visit family, said once she returns she plans to stick close to home.
“We’re not going to the U.S., we’re staying in Canada [to] enjoy the summer here,” said Machado.
Canadian fare war
As many Canadians reconsider their U.S. travel plans, some airlines have also added new capacity to Europe. Air Canada added a new summer service between Montreal and Edinburgh and ramped up service to Paris, Rome and Athens.
WestJet has also added new service from Halifax to Barcelona and Amsterdam.
Discover Airlines, which is owned by German carrier Lufthansa, anticipated that more Europeans will visit Canada this summer on its new Munich-Calgary route — and it hopes Canadians will do the same.
“[The Munich airport] has very short connecting times, very short flights to other destinations in Europe,” CEO Bernd Bauer told CBC News at a recent news conference in Calgary. “It’s great to travel there.”
However, airlines are somewhat limited in their ability to redeploy U.S.-destined flights to overseas routes, said aviation expert John Gradek.
North American flights usually use narrow-bodied planes that can’t make it from west of Quebec to continental Europe, he said.
That means there are limited opportunities to redeploy these aircraft anywhere other than the Canadian market, which could lead to an oversupply of Canadian seats during the summer travel season.
“My forecast is that we’re going to be looking at probably a price war, starting sometime around the beginning of May,” he said.
Arnot also suggested that airlines might slash prices to entice Canadians into taking U.S.-bound flights that can’t be cancelled.
Although travel demand is being dampened by the low Canadian dollar and possible recession fears, “you might be able to get a relatively inexpensive trip to New York,” Arnot noted.
“It’ll be an interesting summer.”
