Air Transat and WestJet are scaling back their flight capacities in response to the cost of aviation fuel that has escalated since the start of the war in Iran.
Both carriers made the announcement this week as cost pressures continue to hit the airline sector.
Transat A.T. Inc., the travel company that owns Air Transat, says it is cutting capacity by 6 percent from May through October, which covers the crucial summer travel season. It has also announced plans to lower flight frequencies on some routes to Europe and the Caribbean and extend its suspension of service to Cuba in response to ongoing volatility in energy markets and fuel supply constraints in certain regions.
Calgary-based WestJet has also announced capacity reductions of approximately 1 percent in April, 3 percent in May, and nearly 6 percent in June.
No routes have been eliminated at this time, but WestJet said it is “evaluating its summer schedule” for potential cuts. The airline said it is actively monitoring the global jet fuel supply situation and remains in regular contact with its fuel suppliers.
The airline is currently combining flights on some routes and has decreased the travel timeframe for seasonal service to a number of destinations.
Air Canada Cuts
WestJet’s announcement this week comes after Air Canada said it would suspend six routes, citing fuel costs that have made them unprofitable. Among the cuts were flights to New York City’s JFK airport from Toronto and Montreal between June 1 and Oct. 25.Air Canada also announced last week its plan to implement higher baggage fees. It said the price would rise from $35 to $45 for the first checked bag in its basic economy class on domestic, U.S., and sun destination flights.
Air Canada spent more than $5.1 billion on jet fuel in 2024, accounting for 24 percent of the carrier’s operating costs—its largest expense. It is anticipating much higher costs this year now that the price of jet fuel has increased twofold since the start of the conflict in Iran.
The U.S.-Israeli military action against Iran that began in late February resulted in a near-shutdown of the Strait of Hormuz. This development triggered considerable surges in oil prices and even larger increases in jet fuel costs, which remain at double their levels prior to the conflict, even with a tenuous ceasefire in place.
Approximately one-fifth of the world’s oil supply—20 million barrels daily—passes through the waterway that connects Iran and the Arabian Peninsula before reaching the open seas and global customers.
Canada obtains a large portion of its jet fuel domestically or from the U.S. Gulf Coast and Pacific Northwest. This minimizes the risks associated with long-distance imports from the Middle East but may not help lower costs. Pricing is connected to global commodity markets and airlines purchase jet fuel through contracts that are linked to market indexes, regardless of the fuel’s origin.
Energy and shipping experts have been warning since the start of the war that an increase in energy costs would be passed on to consumers and predicted major shortages.
