Key Takeaways
- 68% of Canadians have not traveled to the US in the past year, according to Abacus data
- The average cost of an economy flight to the US has increased by 8% year-over-year, reaching $522 on average
- Canadian airlines have reduced capacity to the US by 10% in the first quarter of this year
- Demand for US travel has remained low, but costs have risen due to reduced capacity and changes in flight schedules
- Canadian travel companies are adapting to the shift in demand by offering more flights to alternative destinations such as Mexico and Southeast Asia
Introduction to the Shift in US Travel
The trend of Canadians avoiding travel to the US has continued, with 68% of Canadians stating that they have not traveled to the US in the past year, according to recent Abacus data. This shift in travel habits has been driven by a combination of factors, including rising anti-US sentiment and increasing airfare costs. When US President Donald Trump first suggested that Canada should become the 51st state, prices for southbound flights dropped significantly, with some destinations experiencing price decreases of up to 37% year-over-year. However, this trend has since reversed, with the average cost of an economy flight to the US increasing by 8% year-over-year, reaching $522 on average.
Changes in Flight Capacity and Costs
The increase in airfare costs can be attributed to the reduction in flight capacity to the US. Canadian airlines have reduced their capacity to the US by 10% in the first quarter of this year, with WestJet Airlines shrinking its capacity by 19% and Air Canada and budget carrier Flair cutting capacity by 7% and 58%, respectively. This reduction in capacity has led to higher costs for travelers, as airlines have adjusted their schedules and routes to meet the decreased demand. According to Amra Durakovic, spokesperson for Flight Centre Travel Group Canada, "February, March, April, that’s sort of when we saw the drop in prices, because airlines were still running at full capacity. Then they adjusted."
The Impact on Canadian Travelers
The shift in travel habits and increase in airfare costs has had a significant impact on Canadian travelers. While some Canadians may be deterred from traveling to the US due to the increased costs, others may still be willing to travel to the US for business or pleasure. According to Abacus data, 32% of Canadians who responded to the survey traveled to the US in the past 12 months for business or pleasure. Additionally, corporate travel to the US has remained stable, with multinational companies still needing to send key personnel to the US. Beth Nanton, partner and US immigration practice leader at KPMG Law, noted that "multinational companies with a significant presence or sales in the US still need their key personnel to enter the country."
Adapting to the Shift in Demand
Canadian travel companies are adapting to the shift in demand by offering more flights to alternative destinations. Flair Airlines, for example, launched new non-stop service to Mexico City from Toronto and Vancouver starting last fall, with one-way fares beginning at $141. Air Canada has also announced new North American non-stop seasonal flights to Sapporo, Japan, flying directly from Vancouver starting in December 2026. According to Statistics Canada, Mexico became the most visited overseas country by Canadian residents in the second quarter of 2025, followed by France and Britain. Japan, meanwhile, saw an 88% year-over-year increase in Canadian visitors in the second quarter, followed by Spain at 70.5% and France at nearly 50%.
Conclusion
The shift in travel habits and increase in airfare costs has had a significant impact on Canadian travelers. While some Canadians may be deterred from traveling to the US due to the increased costs, others may still be willing to travel to the US for business or pleasure. Canadian travel companies are adapting to the shift in demand by offering more flights to alternative destinations, and it will be interesting to see how this trend continues to evolve in the coming years. As the travel industry continues to adjust to the changing demands of Canadian travelers, it is likely that we will see more innovative and flexible travel options emerge, catering to the diverse needs and preferences of travelers.