Canadian Industrial Outlook: Air Transportation—Summer 2017
The Conference Board of Canada, 17 pages
September 21, 2017
Todd A. Crawford
This report examines the short-and medium-term economic and profitability outlook for Canada’s air transportation industry.
- Golden Age of Air Travel—Underlying demand fundamentals have never been as strong as they are today for the global airline industry, and this is even more true for Canadian airlines. Low fare prices continue to stimulate demand for domestic travel and a weak currency is attracting record numbers of international travellers flying to Canada.
- Fares—Air fares will fall for a third consecutive year in 2017 as lower fuel costs provide major players plenty of room to cut prices. But the downside to this development is that it is harder for new entrants to break into the Canadian market, as prices are already low.
- Financial Performance—Demand is surging and airlines have added capacity to capture as much of this trend as possible. Meanwhile, cost pressures have eased dramatically thanks to lower fuel prices. This leaves the industry’s financial position as strong as it has ever been, with pre-tax profits projected to hit new highs in 2017.