CBJ JANUARY 2026

15 CANADA OPENS SKIES TO EXPANDED AIR TRAVEL JANUARY 2026 « The Canadian Business Journal 14 travellers have alternatives - something that Middle Eastern and European passengers have benefitted from for years thanks to robust open skies agreements. For Canadian travellers, the recent agreements signal a shift toward that model. As more carriers begin offering service on routes that Canadian airlines previously dominated, pressure will mount on price structures. The expanded agreements allow foreign carriers to bring their pricing strategies and route efficiencies into play, increasing competitive pressure on legacy carriers like Air Canada and WestJet. Critics might argue that expanded access alone won’t instantly slash ticket prices. After all, airfares are influenced by a broad set of factors, including fuel costs, airport fees, and airline operations. However, most analysts agree that over time, increased frequency and more carriers serving Canadian destinations will lead to more competitive pricing. In markets where multiple carriers serve the same destinations - think flights from major Canadian airports to Europe or Asia - travellers typically see a greater range of prices and often lower average fares than in markets dominated by only one or two carriers. The Carney government’s move also sends a signal that Canada is committed to dismantling barriers that have limited access and helped keep costs high for travellers. In markets where airlines have faced few challengers, passengers have had fewer reasons to expect innovation or lower prices. Introducing more international players into Canada’s skies brings new business models, pricing strategies, and customer service approaches that benefit consumers. It also opens remote gateway cities to direct service previously unavailable, meaning Canadians won’t always have to connect through U.S. hubs to reach global destinations. Beyond price competition, the increase in route options alone creates value for travellers. Increased flight frequency and destination variety mean Canadians can plan travel that more closely fits their schedules and personal needs. Whether it’s more daily flights to the Middle East, additional transatlantic options, or access to new hub connections through Gulf carriers, travellers now have opportunities to avoid inconvenient flight times and excessive layovers - frequently hidden costs of international travel. These improvements reduce the overall “time cost” of travel as well, which is a real economic benefit for consumers and business travellers alike. The expanded agreements also have broader implications for Canada’s tourism industry. When more carriers operate in and out of Canadian airports, inbound travel tends to increase. This benefits local economies from coast to coast, supporting jobs in hospitality, transportation and retail. But even for Canadians who don’t travel internationally, the ripple effects of more competitive pressures - including incentives for domestic airlines to streamline operations and pricing - can be felt in savings on domestic travel and improved service standards. Of course, raising competition doesn’t automatically guarantee lower fares on every route, overnight. Market dynamics vary by city pair, airline strategies, and seasonal demand. But the expanded access dramatically increases the probability of fare competition setting in where it once could not. Over time, as foreign carriers establish routings and business strategies in Canada, incumbents will have to adapt. That adaptation often translates into incremental benefits for travellers: better pricing, improved in-flight services, and more choices in how and when to fly. For Canadian travellers fatigued by limited choices and high costs, this policy shift provides a hopeful outlook. By allowing more flights, more airlines, and more competition in Canada’s skies, the Carney government has taken a step toward making international travel more affordable and accessible. Whether planning a family vacation, a business trip, or a once-in-a- lifetime adventure abroad, Canadians now have reason to believe the price of airfare may start to reflect a more competitive global market - one that works for travellers, not just carriers.