Canadians paying higher airfares as air travel recovers from pandemic, carriers use smaller planes

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Canadians returning to air travel are faced with more than just vaccine checks and waiting to board – they are paying more for their seats.

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The average price of domestic round-trip plane tickets in July 2021 rose 21 percent compared to the same month in 2019, long before the COVID-19 pandemic halted most air travel and sent the industry into a deep financial crisis.

According to data provided by British-based aviation consultancy Cirium, specific return ticket taxes within Canada rose by about $100 in the first two years to $532.

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A return ticket on the Toronto–New York route increased by the same amount over this period, while Calgary–Vancouver seats cost 16 percent more, according to Cerium, which analyzed fares for all classes of domestic and foreign commercial airlines from multiple sources. does.

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Prices are rising as vaccinated Canadians enjoy a wider range of destinations and routes, a year and a half after nearly all air travel was halted due to the pandemic.

Airlines, which posted deep losses during the shutdown, are restarting amid rising fuel prices, and are saddled with the high per-seat costs associated with the smaller planes they deploy.

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For example, Air Canada used to fly from Toronto to New York with Airbus A320s, which seat about 150. In July, the airline flew Embraer E175s, which seat about 80 people, but require the same number of pilots and carry the same number of pilots. Landing charges and other expenses.

Cirium’s July pricing data, the most recent available, covers the period in which Air Canada, WestJet Airlines Ltd. And Flair Airlines was flying a small number of battles. Porter Airlines was closed by early September and air transit was resumed in late July. The land border with the United States was closed, making air travel the only option for those wishing to head south.

Peter Fitzpatrick, a spokesman for Air Canada, said the carrier doesn’t usually talk about its pricing strategy. “Air fares fluctuate all the time,” Mr. Fitzpatrick said. “This may be due to competition, market conditions, seasonality, supply and demand, cost and other factors. Also, as we emerge from the pandemic, all carriers are in the process of rebuilding their networks, so for network carriers like Air Canada, a direct comparison with pre-pandemic conditions at this time is not always valid because our network A lot has changed since 2019. “

Cameron Dorxen, a stock analyst at National Bank Financial, said airfares have come down in recent days as competition intensifies as airlines restart and expand, especially on shorter routes and transcontinental flights in western Canada. He cited two possible explanations: weaker declining travel periods and the extension of discount carrier flair.

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In the long run, the fleet expansions announced by Porter Airlines, Flair and Canada Jetline will increase the number of available seats by 20,000, or about 21 percent. “The proposed capacity expansion will be a dramatic increase in competitiveness that has the potential to lead to a longer period of lower airfares for all industry players.”

Cerium’s data showed the average return fare between Toronto and New York airports in July cost $423 before tax. This is in line with Air Canada’s affordable fares for flights to LaGuardia Airport in October and early November, according to the carrier’s website.

The Calgary-Vancouver return fare, before taxes, costs an average of $396 in July, 2021. The same WestJet fares range from $407 to $1,054 for a weekend in late October, inclusive of fees and taxes. Flair Airlines charges $240 for the same fare including taxes. (Flair charges $59 for each carry-on bag and $79 for a checked bag; WestJet’s low-cost fares charges at least $30 for a checked bag.)

Jacques Roy, a transportation business professor at HEC Montreal, cautioned that forecasting fare inflation can be difficult given the airline’s market and prices of seats. But he said the higher fares are a sign that airlines are trying to return to profitability after a pandemic halted flights for several months, leading to thousands of layoffs and deep financial losses.

Pro. Roy said positive signs for the airline industry include rising winter travel demand and gains posted by US carrier Delta Airlines. Delta said it posted a profit of US$194 million for the third quarter, excluding US$1.3 billion in government aid.

But the carrier said higher fuel prices threaten to curtail its profits in the coming quarters. Fuel costs have gone up by around 60 per cent this year due to the rise in oil prices.

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Air Canada will take a look at its financial health on November 2, when it reports quarterly results. In the third quarter of 2020, the Montreal-based airline lost $685 million as passenger numbers fell by 88 percent from the same period a year earlier.

Pro. Roy expects domestic carriers to see better times by the third quarter of next year. “I am hopeful that things will improve,” he said. “Maybe not as much as we were in 2019. I’m part of those who think things will get better than expected.”

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