US-Canada air travel demand plummets amid trade tensions

Air Canada and other airlines have been considering capacity reductions on US-bound routes. Although Air Transat has limited US exposure, the airline is monitoring potential last-minute booking changes due to the economic environment. Air Transat's President and CEO, Annick Guerard, mentioned that they are "closely monitoring the situation as it evolves," coinciding with the start of the summer booking period on March 30.

WestJet CEO Alexis von Hoensbroech expressed disappointment about the ongoing trade tensions since the tariffs announced by US President Donald Trump. "I am personally very disappointed by the way things are going. I think that a trade war is the very last thing this country, this continent, this world needs," he told CTV News.

Air Canada, having set financial expectations for 2025, acknowledged that its guidance hinges partly on "the potential impact of statements or actions by governments relating to the imposition of (or threats to impose) tariffs on exports or imports, and related consequences." The airline reported expected year-end results, maintaining that developments could affect these projections.

Despite this backdrop, airlines have registered a slight increase in capacity between Canada and the US. Airlines have increased flights by 4.1% and seats by 4.5% for the March to October period compared to 2024. However, Canadian airlines like Air Transat and Flair Airlines have been reducing flights by 22.1% and 26.5%, respectively.

Ongoing tensions and economic policies continue to play a crucial role in shaping future air travel demand. With uncertainties still present, adjustments in capacity and flight schedules may continue.