Driven Away: Why More Canadians are Choosing Cross Border Airports

The Conference Board of Canada, 44 pages, October 2, 2012
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Why are Canadians crossing our southern border on land to fly from U.S. airports? This report examines the issues and suggests some policy responses that could reduce the cross-border leakage. Read the Executive Summary.

Document Highlights

Each year, roughly five million Canadians cross the United States border on land in order to fly from U.S. airports. In many cases, Canadians are switching to American flights at the expense of Canadian carriers and airports. Cross-border air fare shopping is being driven by a “perfect storm” of many different factors. Canadian fees and taxes account for a significant share of the higher cost of travelling from Canadian airports, but a wide range of other factors, including fuel and labour costs, U.S. fees that apply only to transborder flights, air carrier productivity, and the rise in the value of the Canadian dollar, also play significant roles.

Driven Away: Why More Canadians are Choosing Cross Border Airports examines these issues and suggests a number of policy responses that could reduce the cross-border leakage. Lost traffic means both higher travel costs and reduced connectivity for all Canadians.

Table of Contents

Executive Summary

Chapter 1—Introduction

Chapter 2—Why Are Fares From the US So Much Cheaper? An Analysis of Air Carrier Base Fares

Base Fares and Air Carrier Costs

Chapter 3—And All Those Fees and Taxes

The Impact of Exchange Rates

Chapter 4—Wider Considerations and Implications

  • Do Cheaper Prices Across the Border Stimulate More Demand?
  • Generalized Travel Cost
  • Market Share Analysis
  • Air Fare Elasticities
  • Other Costs and Impacts of Cross-Border Air Fare Shopping

Chapter 5—Conclusion

Appendix A—Bibliography

Appendix B—Canadian Airports Council Passenger Leakage and Airfare Analysis

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