OTTAWA — Airlines are reporting resilient travel demand heading into the peak travel season despite higher fares, greater global conflict, and Canadians’ shunning of the U.S. – and that means higher ticket prices likely won’t come down until early autumn, according to the latest report from Signal49.

And if the trade war with the U.S. sees a resolution in 2027 – admittedly, that’s a big if – the move forward would spur economic recovery, boosting tourism demand and industry revenues.

Signal49, the re-branded name for the Conference Board of Canada, today released its latest report, ʻIndustry Lens – Air Transportation August 2026.’

The report looks at everything from travel intentions to airline strikes, to the high airfare prices Canadians pay out especially for domestic travel, jet fuel costs, fuel surcharges and more.

The report is available for a fee from Signal49. Here’s a quick look at 10 key takeaways …

1. THE U.S. MARKET: The number of Canadian air travellers returning from the U.S. fell on a year-over-year basis for 32 straight months through April 2026 while the U.S. share of Canadians returning by air from abroad averaged about 35.5% – well below the 42.5% 10-year mean.

2. TRAVEL INTENTIONS: Signal49’s Travel Intentions Survey, released earlier this summer, showed that of those respondents planning take a trip outside Canada this summer, 30% planned to go to the U.S.: up from 26% in 2025, but down sharply from 46% in 2024. Europe was the big gainer, rising from 25% in 2024 to over 33% in both 2025 and 2026. For more than a year now Canadian airlines have responded by adding routes to Europe and sun destinations, and trimming some U.S. routes and capacity.

3. RESILIENCY: Overall travel demand may remain muted, says Signal49 – but global uncertainty and economic conditions “are becoming less top-of-mind for Canadians.” The Travel Intentions Survey found that 70% of respondents said they planned to take a leisure  trip this summer, while those who plan to travel to other countries rose to 29% from 25% a year earlier.

4. AIRCRAFT ORDERS: Air Canada will take delivery of 35 planes – a mix of Boeing and Airbus planes – this year. It has also ordered eight Airbus craft and optioned eight more. WestJet has a firm order book of 123 aircraft, to be delivered over the next few years. Porter Airlines has recently taken delivery of 50 aircraft and plans to buy at least 75 more.

5. AIRPORT USER FEES: Canadians pay high airport user fees, embedded in ticket prices. The report notes that while these costs are generally recouped from travellers, the federal government’s spring economic update suggested plans to examine this structure.

6. LABOUR: “The air transportation industry is … troubled,” says Signal49. Pilot retirements are widespread, and air traffic controllers are 200 employees short of target levels. Multiple fixes are underway.

7. STRIKES: Recent labour strikes during peak travel periods severely disrupted travel. “Labour relations should improve as compensation rises, but the threat of further strikes to industry growth remains an important downside risk.” Workers’ collective bargaining victories boosted air transportation wages by 12.8% in 2025 – a four-year high. The 2025 leap also far outstripped the 2.7% increase in the average wage for all industries.

8. HIGH PRICES: “Canadians pay disappointingly high prices for air travel,” says Signal49, adding that the industry’s oligopolistic market structure invites higher pricing. Noting the proliferation of fuel surcharges amid the U.S.-Iran war, domestic economy airfares stayed at the 11% increase from a year earlier, while international fares were roughly comparable year-over-year.

9. PRICE GROWTH: Consumer air transportation prices fell by 6.9% in 2025 due to lower demand and softer oil prices. This year’s higher oil prices and strong wage gains prompted prices to rebound; they will end 2026 up by 3.5%. For 2027, falling oil prices and moderating wage gains will limit price growth to 1.6%.

10. DOWNWARD PRESSURE: Airfares could face further downward pressure and even fall were Canada’s air travel market to become more competitive, notes the report. A 2025 Competition Bureau study suggested 10 means to achieve this – headlined by the proposal to allow foreign competition. A parliamentary committee studied this report and made eight recommendations. Despite industry blowback, there is a good chance that some of the committee’s recommendations will be adopted, says Signal49. “This will help to moderate air transportation price growth to annual increases close to 2% in 2028–30.”

Signal49’s site with the report is here.