Sunday, June 22, 2025
Canada’s travel crisis is intensifying because domestic airfares are soaring, budget airlines are collapsing, political tensions with the US are deterring cross-border trips, and growing pressure is mounting to open the market to foreign airline competition. As Canadians avoid the United States in protest of hostile rhetoric and trade friction, they’re turning to local travel — only to face prohibitively high ticket prices and shrinking airline options at home. With low-cost carriers like Lynx Air shutting down and subsidiaries such as Swoop and Sunwing absorbed into WestJet, Canada’s airspace is now dominated by two major players, limiting choice and inflating costs. A new report from the Competition Bureau warns that unless bold reforms are introduced — including allowing 100% foreign-owned airlines to serve domestic routes — affordability and access will only worsen, especially for communities outside major cities.
Soaring Airfare Turns Domestic Travel Into a Luxury
For Canadians hoping to explore their own country this year, the cost of flying has become a major obstacle. With ticket prices often rivaling — or even exceeding — the cost of international trips to Mexico or Europe, domestic travel is beginning to feel out of reach for the average traveler.
A one-way flight from Toronto to Vancouver can cost just as much as a transatlantic journey. For many, this pricing makes no sense. And now, with cross-border travel to the United States declining sharply, more Canadians are trying to stay local — only to be hit with fares that make them think twice.
The problem? A lack of competition.
Airline Collapses Shrink Options and Raise Prices
The current pressure on travelers didn’t happen overnight. It intensified after a series of low-cost airline failures that shrank the market and handed more power to the country’s top two players: Air Canada and WestJet.
Lynx Air, a budget carrier that launched in 2022, abruptly shut down in February 2024, citing financial strain and unsustainable market conditions. Soon after, Swoop and Sunwing Airlines — both operated by WestJet — were also folded into their parent brand, removing yet another layer of low-cost competition from the skies.
These collapses reduced fare pressure and gave travelers fewer alternatives. Today, most Canadians are left with two main options, and little hope that prices will fall without outside intervention.
Cross-Border Fallout with the U.S. Adds to the Strain
At the same time, a chilling shift in Canada–U.S. relations has pushed many Canadians to rethink travel south of the border.
Fueled by rising nationalist rhetoric, trade tension, and open insults from President Trump, a growing number of Canadians are choosing not to spend their dollars in the U.S. this summer. That decision has led to a 21 percent drop in Canadian bookings to American destinations, leaving popular border towns in states like Vermont and South Carolina reeling from the absence of their northern neighbors.
What began as a cultural statement has now collided with economic reality: Canadians want to travel more locally — but domestic flights are simply too expensive.
Competition Bureau Pushes for Major Airline Reform
To address the growing crisis, the Competition Bureau of Canada spent over a year reviewing the state of the domestic airline industry. Their findings, released this week, outline a deeply concentrated market where competition is low, fares are high, and barriers for new players are nearly insurmountable.
One of the report’s most headline-grabbing recommendations is a bold call to open domestic Canadian air routes to 100% foreign-owned airlines. These carriers would be required to follow all domestic regulations and use Canadian crews, but they would bring much-needed competition to a market that has grown stale and unaffordable.
The proposal mirrors a similar move that proved successful in Australia, where foreign entry helped lower prices and improve service on once-monopolized routes.
Critics Fear Foreign Airlines Could Hurt Local Jobs
Not everyone supports the idea. Critics argue that foreign carriers could “cherry-pick” the most profitable routes — like Toronto to Vancouver — while ignoring smaller, rural connections that are vital to the country’s regional infrastructure.
Labor groups warn that the plan could come at the expense of Canadian jobs, especially in regional aviation markets already struggling to stay connected. While the bureau insists that foreign carriers would still need to hire Canadian crews and adhere to all local laws, the idea of outside competition has sparked fierce debate.
Other Reforms on the Table
Beyond foreign ownership, the Competition Bureau offered a range of other reforms to shake up the market:
- Loosening restrictions that prevent smaller airports from offering international flights
- Limiting the transport minister’s authority to override antitrust decisions during airline mergers
- Increasing transparency by making airline performance data public, so travelers can make informed choices
While these changes may not have the same headline impact as foreign airline entry, experts say they’re just as critical to building a more balanced and competitive airline market in Canada.
Travelers Turn to Rail and Parks as Alternatives
As the aviation market struggles, other sectors are stepping in to offer relief. The agency managing Canada’s national parks recently launched the Canada Strong Pass, which includes:
- Free admission to national parks and select museums
- Twenty-five percent off camping fees
- Discounted or free VIA Rail tickets for certain routes
It’s a clear attempt to ease the financial burden on domestic travelers and redirect tourism spending into more sustainable, homegrown experiences — especially during a summer when many Canadians are hesitant to cross borders or pay airline premiums.
Canadian Airline Route Cancellations and Reductions in 2025
| Airline | Route(s) | Change Type | Details | Effective Period |
|---|---|---|---|---|
| Lynx Air | All domestic and U.S. routes | Cancelled | Ceased operations entirely | February 26, 2024 |
| WestJet Link | All regional feeder services | Cancelled | Ceased all regional operations | October 26, 2024 |
| Northwestern Air | Northern Alberta and NWT regional routes | Cancelled | Ended all scheduled passenger flights | January 16, 2025 |
| Air Canada | Montreal – Detroit, MinneapolisToronto – IndianapolisVancouver – Nashville, Tampa | Cancelled | Dropped entirely from winter schedule | Winter 2025–26 |
| Air Canada | Toronto – Hartford, Kansas City, Baltimore, PortlandMontreal – New Orleans | Cancelled | Dropped from U.S. route map | January–May 2025 |
| Air Canada | Toronto – Newark | Reduced | From 4x to 2x daily | Spring–Summer 2025 |
| Air Canada | Vancouver – Los Angeles | Reduced | Shifted to seasonal service only | Summer 2025 onward |
| WestJet | Calgary – New York LaGuardiaEdmonton – Orlando | Cancelled | Pulled due to low cross-border demand | January–May 2025 |
| WestJet | Calgary – Las Vegas | Reduced | Trimmed to 3x weekly | April 2025 onward |
| WestJet | Winnipeg – Los Angeles | Reduced | Cut to 2x weekly | Spring 2025 |
| WestJet | Vancouver – Orlando | Reduced | Shifted to winter-only | Post-winter 2025 |
| Flair Airlines | Toronto – NashvilleCalgary/Edmonton – Las VegasKitchener – Fort LauderdaleVancouver – Palm Springs | Cancelled | Several U.S. routes dropped | January–May 2025 |
| Flair Airlines | Edmonton – Phoenix | Reduced | Trimmed to 1x weekly | Jan–Mar 2025 |
| Flair Airlines | Calgary – Palm Springs | Reduced | Frequency cut in low season | Throughout 2025 |
| Porter Airlines | Toronto – San Diego (ends Jun 25)Montreal – Las Vegas (cancelled pre-launch) | Cancelled | Announced cancellations before or mid-launch | Jan–Jun 2025 |
| Porter Airlines | Toronto – Boston | Reduced | Cut from 5x to 3x daily | May 2025 onward |
2025 Global Airline Route Cancellations and Frequency Reductions
| Airline | Route(s) Affected | Change Type | Details | Effective Period |
|---|---|---|---|---|
| Air India | Delhi – Toronto, Vancouver, San Francisco, Chicago, WashingtonDelhi – London HeathrowAmritsar – London GatwickGoa – London GatwickDelhi – Nairobi | Reduced & Suspended | 15% cut to long-haul schedule (38 flights/week), select routes paused till July | June–July 2025 |
| AI916 (Dubai–Delhi), AI156 (Amsterdam–Delhi), AI152 (Zurich–Delhi)Domestic (e.g., Mumbai–Ahmedabad) | Cancelled | 20+ flights cancelled post-crash and Middle East tensions | June 19, 2025 | |
| Delta Air Lines | JFK, Atlanta – Paris, Milan, Frankfurt, Rome, etc. (11 routes) | Frequency Reduced | Transatlantic winter service trimmed | Winter 2025–26 |
| El Al / United / Delta | All flights to/from Tel Aviv, Israel | Cancelled | Suspended due to Israel–Iran conflict | Ongoing (since April 2025) |
| China Southern | Beijing Daxing – Moscow Sheremetyevo | Suspended | Daily service paused due to geopolitical concerns | Jan 20 – Mar 30, 2025 |
| Voepass (Brazil) | Multiple regional domestic routes across Brazil | Suspended | Network-wide halt following fatal crash | Early 2025 |
| LOT Polish Airlines | Budapest – Seoul | Cancelled | Long-haul Asia route ended permanently | March 2025 |
| airBaltic | 4 specific European routes (not publicly detailed), 19 others with heavy frequency cuts | Cancelled & Reduced | Caused by Airbus A220 engine maintenance delays | Throughout 2025 |
Canada’s travel crisis is worsening due to soaring domestic airfares, the collapse of budget airlines like Lynx Air, and declining U.S. travel driven by political tensions — all of which have sparked urgent calls to allow foreign airlines into the domestic market to restore competition and lower prices.
A Crisis With No Quick Fix
While the Competition Bureau’s recommendations mark a clear step toward reform, the federal government is not required to act on any of them. And for now, no formal action has been announced.
That leaves Canadians stuck in a travel limbo — caught between rising domestic costs, fewer airline choices, a shrinking U.S. travel appetite, and an uncertain future for air competition in their own country.
Unless major changes are made, the crisis is likely to grow. Whether Canada opens its skies to foreign airlines or doubles down on protecting its legacy carriers, travelers will be watching — and waiting — for better options to finally take flight.
