Air Canada has announced a remarkable uptick in corporate travel, with a nearly 30-per-cent increase in international traffic, particularly to Europe and the Pacific. This surge is being attributed to Canada’s ongoing efforts to diversify its trade relationships, moving away from an over-reliance on the United States. Mark Galardo, the airline’s Chief Commercial Officer, highlighted these trends during an analyst call on Friday.
Significant Growth in International Routes
In its fourth-quarter financial report, Canada’s largest airline projected core profits for 2026 that slightly exceed Wall Street expectations, buoyed by the growing demand for international routes outside the U.S. The airline is strategically focusing on expanding its reach, particularly in the North Atlantic, where corporate demand has surged significantly. Galardo noted that part of this growth can be linked to Canada’s attempts to establish new trade corridors.
“The increase in corporate traffic to Europe and the Pacific is a clear indication that our efforts to diversify are paying off,” Galardo stated. The airline’s strategy seems to be aligning with broader governmental initiatives aimed at creating a more balanced global trading framework, as officials seek to engage more closely with markets like China and pursue smaller trade agreements to mitigate dependence on U.S. commerce.
Premium Travel Demand on the Rise
Air Canada is also witnessing robust demand for premium travel, which now constitutes approximately 30 per cent of its total passenger revenue. The airline’s ability to capitalise on this trend has been crucial in countering the decline in bookings for U.S.-Canada routes, largely due to ongoing trade tensions between the two countries.
The airline anticipates that the combination of increased premium capacity and long-haul travel will help offset any potential downturn in transborder traffic. With Canadians increasingly opting for international holiday destinations rather than travelling south of the border, Air Canada is well-positioned to meet the evolving preferences of its customers.
Capacity Expansion Plans
Looking ahead to 2026, Air Canada plans to expand its capacity, with an expected increase in available seat miles (ASM) ranging from 3.5 to 5.5 per cent. This measure is crucial for understanding the airline’s passenger-carrying capacity and indicates that Air Canada is preparing for sustained growth in international travel sectors. The airline aims to enhance its offerings, particularly in premium classes, which have shown resilience despite challenges in other market segments.
As the company continues to navigate the shifting landscape of global travel, it remains committed to maintaining a strong presence in lucrative international markets, while adapting to the changing dynamics of North American trade.
Why it Matters
The shift in Canadian corporate travel patterns underscores a pivotal moment for both Air Canada and the nation’s economy. By reducing dependency on the U.S. market and embracing international opportunities, Canada is not only fostering a more resilient travel sector but also contributing to a broader economic strategy aimed at ensuring long-term sustainability and growth. This adaptability is vital in an increasingly interconnected world, where geopolitical shifts can have significant implications for trade and travel.
