Air Canada concerned about U.S. dropoff as new tariffs loom

U.S. President Donald Trump is expected to launch new tariffs against countries around the world today (April 2) in what analysts say could be the largest escalation of his trade war.

Trump’s so-called “Liberation Day” is a move that he believes will restore America’s manufacturing sector as companies retool their supply chains to avoid fees.

Canada, for one, is bracing for a fresh round of U.S. tariffs. Wednesday also marks the deadline for Trump’s temporary exemption of auto parts and other goods traded under North American free trade rules from sweeping 25 per cent tariffs.

All of this, combined with Trump’s repeated talks of making Canada a 51st state, has led to a decline in Canadians visiting the U.S. as many take their dollars elsewhere – or explore closer to home.

Airlines are certainly feeling the impact. Air Canada, at an annual meeting on Monday (March 31), revealed that U.S. flights for the next six months were down by 10 per cent compared to last year’s April-to-September period.

READ MORE: ACTA outlines U.S. tariffs’ impact on travel & advocacy plan at town hall

“Am I concerned?,” Chairman Vagn Sørensen said in a response to a question from a shareholder at Monday’s meeting, as reported by MSN. “Yes, definitely, I’m concerned.”

U.S.-Canada routes represented 22 per cent of Air Canada’s passenger revenue in 2024.

Air Canada and WestJet have said in separate statements that geopolitical tensions are causing some consumers to choose not to take vacations in the U.S. 

Air Canada, for one, is banking on more demand for Europe as travellers change their final destinations.

The airline revealed Monday that it’s adding capacity this summer to cities such as Edinburgh, Paris, Athens and Rome.

Air Canada will focus on staying “agile,” Sørensen said Monday, maintaining enough flexibility to redeploy capacity when the demand shifts.

Porter, meanwhile, has tweaked its summer schedule so that domestic routes are 80 per cent of its total capacity, up from 75 per cent in its original plan.

READ MORE: Porter expands summer schedule; U.S. presence 25% larger than last year

“Our goal is to fly where our customers want to travel, and this is a moment Canada is at the top of many people’s list,” said Kevin Jackson, president of Porter, in a news release. “We are adding routes and increasing flights in regions across the country to meet this demand.”

The Toronto-based airline, however, remains confident that Canadians will still travel to the U.S.

Porter says its presence in the Canada-U.S. market will be 25 per cent larger than last summer.

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