Skies Will Brighten After Period of Turbulence
Shifting travel patterns, driven by the Canada–United States trade conflict, have forced Canadian air carriers to pivot toward domestic and overseas markets. This rebalancing, combined with weaker overall travel demand, will keep air transportation growth nearly flat in 2025. Some improvement will follow in 2026, though economic weakness in Canada and the U.S. will constrain demand and output. We predict that the industry’s prospects will improve once geopolitical tensions ebb.
What is our outlook for the airline industry over the short and medium term amid strained Canada–U.S. trade relations? What other challenges does the industry face on the domestic front and how is it responding to these challenges? What recommendations did the Competition Bureau Canada provide to improve competition?
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