The demand for flights from Canada to the U.S. has “collapsed,” a new report says.
Fueled by fury over U.S. President Donald Trump’s tariff war, which escalated on 26MAR with Trump’s announcement of a 25% tariff on automobiles and auto parts crossing into the U.S. from Canada, OAG reports that future bookings made in March of this year are down more than 70% compared to March, 2024.
Flight bookings for April were down 75.7%, which is a truly remarkable figure that puts enormous pressure on airlines that fly between the two countries, as well as tour operators who sell trips to the States and U.S. destinations that rely on Canadian visitors.
“The decline is striking - bookings are down by over 70% in every month through to the end of September," said OAG, one of the top global air travel data companies. "This sharp drop suggests that travellers are holding off on making reservations, likely due to ongoing uncertainty surrounding the broader trade dispute."
Travel experts say the Canadian dollar also is a factor, but the loonie has been sagging against the U.S. greenback for many months, and the drop in air travel is a recent phenomenon.
“For all scheduled airlines operating between the United States and Canada any fall in consumer confidence and subsequent changes to planned travel are a concern, especially in such a large market and when taking place at such short notice,” OAG said.
“Unfortunately, the law of unintended consequences is once again impacting the airline industry adding to what had already become a softening market.
“For those that are still planning to travel there may be some airlines offering particularly cheap airfares over the next few months as they seek to stimulate demand but for the airlines it will be a nervous few months, especially as the traditional ‘snowbird’ market from Canada to the US could be badly impacted next year if the situation doesn’t improve quickly.
HOW DO CANADIAN AIRLINES ADJUST?
“Short notice adjustments to schedules are always challenging for airlines, especially for the summer season when slot availability in alternate markets may not be easy to find,” OAG said on its website. “However, since the beginning of March, WestJet have added an additional 114 flights to Europe as they actively place capacity outside of the United States.
“Limited slot availability at major European airports might be part of the reason Air Canada has not followed WestJet. Although Air Canada typically has larger proportions of connecting traffic across its network, much of which connects at a US hub to one of its Star Alliance partners, making it more difficult to manage when flights are cancelled,” OAG said.
Business Travel News Europe reports Air Canada will begin service between YUL and EDI on 27JUN.
Porter Airlines recently told Open Jaw it’s “reviewing” its U.S. flight routes, but said it wouldn’t be dropping any destinations. It also hinted that its new routes to Mexico and the Caribbean will be coming this winter; a move that seems more likely than ever given the severe drop in Canadian demand for trips to the States.
Air Canada, WestJet and Flair Airlines have all been steadily reducing their exposure on U.S. routes in light of public opinion polls that show a massive disapproval of Trump and a real, never-before-seen level of anger towards U.S. politicians.
U.S. TOURISM IMPACT
The impact of such a drop in Canadian visitors on U.S. tourism could be immense, CTV reports.
Matt Levy, owner of New York City's Spread Love Tours, called the decline of Canadian tourists ‘catastrophic’.
“I’ve been a tour guide and a tour guide company owner for two decades plus and anywhere from 30% to 50% of my student group tours that I assign to my 15-plus tour guides, are Canadian,” Levy said.
The U.S. Travel Association in January said a 10% drop in Canadian tourists would cost the U.S. economy $2.1 billion and lead to the loss of 14,000 jobs. A 70% drop is obviously a far, far greater issue to deal with.
