The Canada-US air travel market is facing turbulent times as Trump tariffs and an escalating trade war take a heavy toll.
With economic tensions rising, airlines, travelers, and industry experts are grappling with a sharp decline in cross-border flights.
Analytics firm OAG reports that airline capacity between Canada and the US has been slashed through October 2025.
The most dramatic cuts hit the peak travel months of July and August, signaling a bleak summer ahead.
Passenger bookings on these routes are down a staggering 70% compared to last year, and future flight bookings have all but collapsed. What’s driving this nosedive, and what does it mean for the future?
Trump Trade War Rattles Travel Market
The Trump administration’s 25% tariff on Canadian goods, paired with Canada’s retaliatory measures, has rattled the economic ties between these neighbors.
This trade war, initially sparked by concerns over drug trafficking and immigration, is now rippling through the travel sector. Recent reports paint a grim picture. A recent report from Flight Centre Canada revealed a 40% drop in U.S. bookings.
Meanwhile, WestJet claims a 25% reduction in passenger flights since Trump took office. Notably, OAG’s latest data confirms the crisis isn’t temporary. Forward demand has evaporated, leaving airlines scrambling to adjust.
Why are travelers staying grounded? For one, uncertainty is a powerful deterrent. Higher tariffs mean rising costs for goods, squeezing disposable income on both sides of the border.
Canadians, frustrated by the trade spat, are also voicing plans to boycott U.S. travel. Social media posts from Ontario highlight this sentiment, with residents opting to skip American trips altogether.
At the same time, U.S. travelers may be wary of Canada’s counter-tariffs and a weaker economic outlook. Add in high-profile incidents like increased ICE arrests at the border and the appeal of cross-border trips fades fast.
Capacity Cuts Through October 2025
Airlines are feeling the pinch. Cutting capacity through October 2025 shows they don’t expect a quick recovery. July and August, typically bustling with vacationers, will see the deepest reductions.
This aligns with the U.S. Travel Association’s warning: a 10% drop in Canadian visitors could mean 2 million fewer trips and billions in lost spending.
With bookings down 70%, the reality is far worse than feared. Future bookings, a key indicator of confidence, offer little hope as demand has simply “collapsed,” per OAG.
Looking Ahead
What’s next for Canada-US air travel? The trade war shows no signs of easing, and economic fallout could deepen. Travelers might turn to domestic options, while airlines may rethink routes and pricing.
For now, the skies between these nations are quieter than ever. The integrated Canada-US economy, once a strength, is now a vulnerability exposed by tariffs. Until tensions cool or policies shift, this downturn looks set to linger, leaving airlines, travelers, and border communities to weather the storm.
This crisis underscores a broader truth: trade wars don’t just hit goods. Applied indiscriminately, they disrupt lives, plans, and connections.
As March 28, 2025, marks another day of strained relations, the Canada-US air travel market remains a casualty of a battle fought far from the tarmac.
Recovery, if it comes, will take more than grounded planes—it’ll need trust rebuilt across the border.
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