Trips to Vegas, Big Apple cut short by low loonie, Air Canada says

Canadians are still taking trips to Las Vegas and the Big Apple, but numbers are dropping while the average length of stay is getting shorter, according to the country’s biggest airline.

Air Canada executives said Wednesday the carrier is seeing a “little bit of softness” on routes to popular U.S. destinations such as Florida, Arizona, Hawaii and Vegas in the wake of the loonie’s sharp descent in value against the U.S. dollar.

The average stay on those trips is also shortening, said Ben Smith, Air Canada’s head of passenger airlines, said.

“A lot of people are still making the trip but they want to make sure it’s within their budget.”

Similar to rival WestJet, Air Canada has been forced to discount some airfares on routes to and from areas of the country hit hardest by the resource downturn, as well as reduce service to places like Alberta.

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More discounting?

But experts are now wondering if discounting is being applied on airfares in other regions, and on some international flights that might be experiencing a drop in demand as the loonie has continued to fall in value, raising costs for Canadian travellers abroad.

Canadian airlines are banking on an influx of tourists from abroad this year to help offset the domestic weakness, hoping foreign travellers will take advantage of the boost their currency will get them.

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“Where we are seeing a big increase is our U.S. inbound tourism, especially Asian inbound tourism and forward bookings on European inbound into Canada,” Smith said. “We’re expecting to see an increase in domestic travel as well for people that might have gone internationally in the past.”

The Air Canada executives were asked if inbound traffic was enough to offset softening demand among Canadians. CEO Calin Rovinescu said it was a “mitigating factor.”

“We like the inbound benefit for sure,” Rovinescu said. “But if I could have a dream environment of low fuel prices and a high Canadian dollar, I would take that any day of the week.”