Canadian airline ticket prices are bouncing back from their deepening pandemic – and with Christmas just around the corner, consumers can expect sky-high prices for the holiday.
Experts say a perfect storm of stalled demand, high costs and rising fuel prices means round-trip tickets could be more expensive than ever this holiday season.
As recently as June, one-way Flights between Toronto and Vancouver were as low as $114. While low-cost tickets are still available as of mid-December, tickets have returned to seasonal highs closer to Christmas, currently between $450 and $1,200 each way for economy flights from Toronto to Vancouver on Air Canada and WestJet. going between.
Ambareesh Chandra, an associate professor of economics at the University of Toronto, said it was clear that airlines would benefit from a reduction in demand as people plan for Christmas stays and travel to hotter destinations.
However, he feels that domestic prices are currently proportionally more expensive than international flights, as there is more uncertainty on international travel than on domestic.
Up for the high tickets at Christmas time? This is a trend we see every year.
“It’s just being scaled up,” Chandra said.
But airlines have been in “suspended animation” for months, Chandra said, and may not return to anything like normal right now. They are facing higher costs compared to pre-pandemic, including rising fuel prices and a drop in business travel that used to subsidize cheap seats, he said.
Air Canada spokesman Peter Fitzpatrick said airfares fluctuate due to competition, market conditions, weather, demand and cost.
Fitzpatrick said in an email that it is difficult to accurately compare 2019 ticket prices because things have changed a lot since then.
WestJet spokeswoman Madison Krueger said that the average fare right now is actually lower than in October 2019, adding that WestJet has more than a million seats available for sale that are less than $100.
But base-fare pricing doesn’t tell the whole story, she said. WestJet is concerned about rising airport correction fees and NAV Canada fees.
“Unfortunately, while airfares fluctuate to accommodate supply and demand, third party fees are structured as fixed charges and apply to all tickets regardless of weak or strong demand, dramatically affects the affordability of air travel in Canada and stifles Canada’s economic recovery,” Kruger said. in an email.
Last month, WestJet operated more than half of its flights in September 2019, it said.
Frederick Dimanch, director of the Ted Rogers School of Hospitality and Tourism at Ryerson University, said that while airlines previously tried to spur demand with lower prices in 2021, demand is now rising with vaccination rates and consumer confidence.
He predicts that people will be itching to go home for Christmas or fly south, because neither of them was possible so many years ago.
“Even in a pandemic, “what goes down must come up,” said John Gradek, a former Air Canada executive and head of McGill University’s Global Aviation Leadership Program.
People are booking what Gradec calls “revenge travel,” or decreased demand after months and months of canceled trips and time away from loved ones.
Gradec said airlines are trying to be more cost-efficient than usual to try and make up for lost revenue. One way to do this is through flight consolidation – canceling a flight with lots of empty seats and moving passengers to another flight.
While this was a practice before the pandemic, Gradec said it is happening more frequently now.
“It’s a mathematical game they are playing,” he said, noting that it could be very disruptive to commuters, and could result in more complaints to the transport authority.
Fitzpatrick said airline schedules change for a variety of reasons, including commercial ones. He said cancellation of flights is not a preferred option for airlines as it causes inconvenience to employees and customers and incurs cost for the airline.
Kruger said schedule changes are a normal part of airline operations; Flight schedules are made in advance, and the pandemic has made it hard to predict things like demand and travel restrictions.
“We are optimistic that fewer schedule revisions will be needed and that we will see an easing of travel restrictions and federal support for travel as we come out of the pandemic and become a fully immunization industry by November 1, 2021,” she said. .
Adding to the mix, Canadians are seeing an increase in cheap airline ticket options, thanks to low-cost carriers including Swoop and Flair. Now, a domestic round trip Swoop (owned by WestJet) or Flair at Christmas can be found on WestJet and Air Canada for the same price as some one-way tickets.
This week, Flair Airlines announced that it would add four new Boeing 737 MAX aircraft to its fleet in the spring of 2022, bringing its total to 16, and allowing it to expand its number of routes by 33 percent.
While competition from low-cost carriers is likely to drive prices down in the mid- to long-term, we won’t see that effect until after Christmas, Demanche said.
But Chandra isn’t optimistic about the future of competition in Canadian airspace.
“The market just isn’t big enough to support many more carriers,” he said.
Right now low-cost airlines are benefiting from the slowdown in demand, but Gradec doesn’t think it will last until the new year.
Gradec said the Canadian market “has not been very kind” to low-cost carriers in the past. “They usually fail.”
But while holiday forecasts reflect an uptick in ticket prices, plane tickets in October are slightly cheaper than pre-pandemic.
According to Adit Damodaran, economist at travel booking app Hopper, the average cost of domestic round trips right now is $435, down nine percent from October 2019. Some flights specifically are down. For example, in October 2019 a round-trip ticket from Toronto to Vancouver averaged $570, but now that trip can be found for 42 percent less at $330, Damodaran said.
Even though the uncertainty of the pandemic is still up in the air, experts say the common sense still holds true: The sooner you buy your holiday tickets, the better price you’re likely to get.
There was no point in waiting to buy holiday plane tickets in previous years, Chandra said, and this year it doesn’t make any sense.
It is better to buy your flight now, and then cancel in case you find a cheaper flight in the future.
“You never know,” he said.
With files from the Canadian Press