Airlines trim capacity as soaring fuel prices reshape schedules

TORONTO — Airlines on both sides of the border are making network adjustments amid ever-changing operating conditions and soaring fuel prices.

Air Transat’s Montreal-Tulum (TQO) service will now start Dec. 20 instead of Oct. 24. The carrier has also suspended YYZ-MAN from Jan. 4 through March 27. Air Transat’s capacity reductions are pegged at 9% for November 2026 and 4% for December 2026 week over week, according to aviation consulting firm Ailevon Pacific.

Meanwhile Air Canada’s service to Nassau from Halifax and Ottawa has been suspended for the weeks of Jan. 9 through Feb. 11.

South of the border, major U.S. airlines attending this week’s 14th annual Morgan Stanley Laguna Conference for business and investors said they’re looking to cut capacity as fuel prices continue to rise, according to reports.

American Airlines’ CFO Devon May said Q4 fuel prices are now about US$1 per gallon higher than the carrier assumed in July, adding US$1 billion in expected costs for the quarter, and potentially leading to operational adjustments.

United Airlines is cancelling some flights planned for December and could make additional schedule adjustments beginning in Q1 2027. Earlier this year United announced plans to cut scheduled flights by 5% in Q2 and Q3.

Southwest Airlines has also scaled back its growth plans. The carrier had expected seat capacity to increase by 2%-3% in 2026. That growth has been reduced by roughly half and further cuts could follow.

Demand is still resilient. And that’s especially true at the high end. According to CNBC, American Airlines CEO Robert Ison told conference attendees that 30% of AA’s seats account for half the airline’s revenue.

Earlier this month AA debuted its newly retrofitted B777-300ER cabin, with more Business Class and Premium Economy Class seats than any other U.S. carrier. The decked out aircraft offer 70 ‘Flagship Suite’ seats, i.e. Business Class, with privacy doors, more storage space and a chaise lounge seating position, plus 44 Premium Economy seats. The aircraft also has 30 extra legroom seats in its main cabin.