On March 31, 2025, The Canadian Press reported significant changes in the air travel landscape as Canadian carriers, including Air Canada (TSX:AC), grapple with declining bookings on U.S.-bound routes. Over the past four months, a weak Canadian dollar has discouraged Canadians from traveling to the United States, leading to a notable decrease in cross-border flight reservations.
The negative currency exchange rate seems to have somewhat dented Canadians’ eagerness to travel south of the border. First, plenty of travelers have made the choice not to travel to the U.S. This major change is having a domino effect all across the airline industry. Air Canada announced that its own bookings on cross-border flights were down, consistent with a 10 percent drop across the industry.
The current tariff crisis has added additional pain for airlines serving Canada. The president of the United States has incited a continental trade war, with threats of annexation creating an atmosphere of uncertainty for potential travelers. In addressing these challenges, airline carriers have made purposeful network changes to better position themselves for the new realities of the market.
Most Canadian carriers have reduced their capacity for flights to the United States, redirecting focus toward bolstering domestic and transatlantic service offerings. Flair Airlines surprised the industry last week with a bombshell announcement—its shift to an all-Canadian fleet by next winter, 2025-26. Cross-border trips will be reduced to only 12 percent of cross-border network, reduced from 20 percent in prior months.
These decisions reflect a broader trend within the industry as airlines strive to remain resilient amid changing consumer behaviors and external pressures. Her screenshot of the new capacity reduced to the U.S. illustrates a blatant about-face in priorities. Carriers are already busy reevaluating their operations in this new economic normal.
