Canadian travelers made 3.8 million trips abroad in April, reflecting a 2.1 percent increase compared to the previous year and marking the first year-over-year monthly rise since February 2025, according to Statistics Canada. Despite this surge in international travel, passengers are unlikely to experience significant relief at the ticket counters soon, even as airlines report substantial savings on jet fuel costs due to recent declines in oil prices.
Airfares have risen notably over the past year, with international fares increasing between 25 and 35 percent in some markets independent of fuel expenses, according to John Gradek, an aviation management lecturer at McGill University. He explained that while some fuel surcharges have decreased recently, the base fare prices have continued to climb. By mid-May, average international ticket prices had risen approximately 15 percent overall, based on data from the travel search engine Kayak. However, with progress in peace negotiations involving Iran, airfares briefly declined by 3 percent year-over-year at the beginning of June, before edging upward again in subsequent weeks.
The airline industry’s fuel expenses have dropped sharply since April, when jet fuel spot prices peaked at $4.88 per gallon. By mid-June, prices fell to about $2.85 per gallon—a level that, if maintained, could reduce the U.S. airline industry’s annual fuel costs by over $40 billion. Despite this significant decrease, airlines have been slow to pass savings on to consumers. Deutsche Bank has estimated that U.S. carriers recoup only about 60 cents of every additional dollar spent on fuel through fare increases, enabling them to use strong travel demand to recover profits rather than lower prices.
Some carriers continue to face financial hardship due to elevated fuel prices. Transat AT Inc., the parent company of Air Transat, announced plans to seek government assistance after reporting a $79 million loss in its second quarter, attributing a significant portion of this deficit to soaring fuel costs. In response, the Canadian federal government extended support to the industry in early June by offering loans of up to $150 million per airline to ease fuel-related pressures. However, this move has drawn criticism from competitors such as WestJet, which urged the government to halt what it called a cycle of “corporate charity.”
Industry officials warn that continued fuel cost volatility may accelerate consolidation within the sector. Willie Walsh, director-general of the International Air Transport Association, noted that financial strain is likely to impact low-cost carriers the most, potentially reshaping the competitive landscape.
Looking ahead, Mr. Gradek cautioned that the effects of the fuel crisis—and subsequent fare increases—are expected to persist into 2027. He pointed to restrictions imposed by Iran on vessel traffic through the Strait of Hormuz after February 28, which contributed to jet fuel prices doubling and have yet to be fully reversed. While travelers may see some post-summer airfare discounts in markets beyond popular sun destinations, the underlying challenges affecting aviation fuel supplies remain unresolved, suggesting that pricing pressures will continue to influence the industry for some time.