Canadian Domestic Airfares Remain Stubbornly High as Demand Stays Strong

Despite domestic economy airfares still 11% higher than last year, Canadians are continuing to fill planes linking cities across the country – enabling airlines to keep fares high.

Travel search platform Kayak reported that international fares were similar to last year’s pricing as of late June, while domestic fares remain stubbornly high.

According to Statistics Canada, 2.5 million passengers boarded domestic flights in May, a 6.4% jump from May 2025. Meanwhile, air travel to the U.S. edged downward 2.1% — the 16th consecutive month of year-over-year decline.

John Gradek, who teaches aviation management at McGill University, told Canadian Press that acceptance of higher ticket prices means domestic fares likely won’t come down until summer demand eases.

“Domestically, it’s gangbusters,” he said. “We’ve got a very strong will on the part of the carriers not to put Canada on sale this summer, because demand is still strong even at those higher rates.”

Domestic travel has been strong since many Canadians made a decision not to travel to the U.S., in response to the tariff war launched by U.S. President Donald Trump and his frequent barbs that Canada should become the 51st-state.

Cashback rewards company Rakuten said its research found that many Canadians are cutting back spending in other areas to fuel their desire to travel.

“Despite rising costs and volatility shaping how people spend, many are making intentional trade-offs elsewhere to protect travel, reflecting a growing desire to reconnect and recharge,” said Rakuten general manager Jennifer LaForge in a news release.

International flights from Canada actually cost between two and three per cent less in June after soaring above 2025 levels through much of April and May. Canadian Press says experts attributed June’s nearly flat year-over-year fares partly to the fact that they rose so high last year on explosive demand amid a boycott on U.S. travel.

Jet fuel costs have dropped 24% over the past month, but remain 30% higher than in late June of last year, according to the International Air Transport Association.