Introduction
WestJet cancelled plans to begin a new Calgary-Austin route mere months after it was slated to start due to a “downward shift” in cross-border travel between Canada and the United States. The cancellation, as revealed by an internal memo issued recently, points to general difficulties in the transborder aviation industry, ranging from economic challenges, decreased business travel, to changing passenger tendencies.
This piece analyzes the motivation behind WestJet’s cancellation, the health of Canada-U.S. air travel, and its implications for the airline sector.
Important Facts on the Cancellation
Route: Calgary (YYC) to Austin (AUS) – initially scheduled to begin October 2024.
Reason: Waning demand on Canada-U.S. routes, especially from business and leisure travelers.
Alternative Routes: WestJet will redirect capacity to more profitable routes, such as sun destinations and domestic flights.
Why Austin?
Austin was perceived as an emerging technology center with potential business traffic.
Weaker-than-anticipated bookings compelled WestJet to trim losses in advance.
Why Is Canada-U.S. Travel Demand Decreasing?
1. Economic Pressures
Increased inflation and higher airfares have rendered cross-border journeys less attractive.
Weak Canadian currency (CAD) making U.S. travel more costly for Canadians.
2. Declining Business Travel
Remote work tendencies continue to deplete company travel budgets.
Slowdown in the technology sector (including Austin) might have damaged anticipated demand.
3. Competition & Evolving Preferences
U.S. carriers (United, American, Delta) have a stranglehold on major Canada-U.S. routes.
Canadians are choosing lower-cost domestic or sun destination flights instead of U.S. city excursions.
Wider Implications for the Airline Industry
1. Airlines Reconsidering Transborder Expansion
Air Canada has also diversified U.S. routes, targeting hubs such as New York and LA.
Ultra-low-cost carriers (Lynx, Flair) are under even more challenging conditions.
2. Emphasis on Leisure Rather than Business Travel
WestJet is placing emphasis on Mexico, Caribbean, and domestic sectors where demand persists.
Airlines can hold back on new corporate-oriented routes until business travel revives.
3. Future Route Adjustments if Demand Doesn’t Recover
Further Canada-U.S. cuts if demand doesn’t pick up.
Airlines might hold off for economic recovery & stronger CAD to grow.
What’s Next for WestJet?
Reallocating Aircraft: In all likelihood moving capacity to sun routes in the winter (i.e., Cancún, Palm Springs).
Domestic Focus: Growing within Canada, where domestic travel demand remains more stable.
Tracking U.S. Demand: May return to Austin or other U.S. cities if the situation improves.
Analyst Comments
Raymond James: “A cautious step considering weak transborder trends.”
TD Securities: “Leisure demand is holding up, but business routes are still under pressure.”
Industry Experts: Anticipate additional route optimizations if fuel prices or demand deteriorate.
Conclusion: A Sign of Cautious Times for Airlines
WestJet’s cancellation of Austin flights is part of a wider Canadian-U.S. airline pullback, fueled by economic volatility and shifting passenger trends. Leisure air travel is still strong, but airlines are more discerning with growth plans—prioritizing profits over growth.
For travelers, this may translate into reduced options for flights to secondary American cities but potentially more favorable fares on available routes as airlines battle for customers.
Final Thought
Will Canada-U.S. travel demand rebound, or is this a long-term shift? Much depends on economic recovery and whether business travel bounces back.
Have your travel plans changed due to high costs? Share your experiences in the comments!