OAG Reports Canada-to-U.S. Forward Bookings Have Collapsed
by Bruce Parkinson
Air Canada says U.S. bookings are down, but not as much as reported.
The worst is yet to come in the Canada-to-U.S. travel market. Statistics from global travel data provider OAGreveal a relatively small downward trend in airline capacity between the two nations, but the big story is a massive decline in forward bookings.
“Despite airline schedule changes and capacity being redirected to other markets, a more troubling trend emerges from forward demand data: future flight bookings between Canada and the U.S. have collapsed,” according to a blog post by OAG chief analyst John Grant.
“Using forward booking data from a major GDS supplier, we’ve compared the total bookings held at this point last year with those recorded this week for the upcoming summer season,” Grant writes.
“The decline is striking — bookings are down by over 70% in every month through to the end of September. This sharp drop suggests that travellers are holding off on making reservations, likely due to ongoing uncertainty surrounding the broader trade dispute.”
Grant notes that any fall in consumer confidence and subsequent changes to planned travel are a concern for all scheduled airlines, especially in such a large market and when taking place at short notice.
The market had already been softening, OAG says, likely due more to exchange rate concerns on the part of Canadians. But the current trade war and President Trump’s frequent attacks on Canadian sovereignty are taking us into uncharted territory.
“For those that are still planning to travel there may be some airlines offering particularly cheap airfares over the next few months as they seek to stimulate demand, but for the airlines it will be a nervous few months, especially as the traditional “snowbird” market from Canada to the U.S. could be badly impacted next year if the situation doesn’t improve quickly.
OAG says data shows that 320,000 seats have been removed by airlines operating between the two countries through to the end of October. The most noticeable cuts are in the peak summer months of July and August where airlines have cut capacity by some 3.5%. It’s a fluid situation, and if the Trump administration backs away from some of its trade threats and temperatures cool, the damage could be lessened. The opposite is also true.
