From NBF :
Airfares in Canada up 4.5% y/y in May and up 15.6% versus 2019 according to CPI data
Canadian CPI data for May was released this morning and the air transportation component increased y/y and was wellahead of May 2019 (pre-COVID). StatCan undertakes a fairly comprehensive monthly fare survey, and based on this, we note the following:
• Relative to May 2023, the index was up 4.5%.
The y/y increase in May follows a flat print in April and a 2.9% y/y increase in March, which was the first y/y increase since March 2023.
Fares were up 2.3% sequentially after declining 5.7% sequentially in April.
• Relative to May 2019, the index was up 15.6%.
The May increase versus 2019 was roughly in line with the April increase versus 2019 of 15.7% but lower than the March increase of 24.0%.
NBF takeaway
Airfares in Canada have strengthened the last three months following an 11-month stretch of y/y declines (on difficult comparables) and remain well ahead of pre-pandemic levels. Recall that Transat reported its Q2 F2024 results earlier in June and noted that it is experiencing some yield softness on trans-Atlantic routes this summer with its summer load factor currently tracking about 2 pts lower y/y and yields down 8%. Air Canada will also likely see some yield deterioration this summer on its Atlantic routes due to difficult comparisons and higher industry capacity. We note, however, that our own fare surveys for Air Canada suggest that domestic pricing is generally higher y/y on the key routes that we track.