Well, THAT was a fun week.

While North America debates who blinked in the looming trade war, the promised tariffs on imports to the U.S. from Canada and Mexico have been put on hold for 30 days.

What was not included in the tariffs, however, was travel.

Yet reports out of Canada suggest a quick response to tariff threats by curbing travel to the U.S. Even after the 30-day reprieve, the trend of booking away appears to be holding. This is especially impactful for travel between the two countries this time of year as March Break traditionally brings much of the Great White North to the sunny South.

This week, we decided to look at the airlines that rely most on transborder travel in March and which could be most affected by the display of Canadian solidarity.

Spoiler alert: It’s the Canadian airlines.

The top three airlines delivering transborder capacity between Canada and the U.S. are Air Canada, WestJet, and Porter Airlines. Notably, Porter Airlines delivers more transborder traffic than American and Delta combined. Unfortunately, for the growing airline, the U.S. represents nearly half of the scheduled ASKs.

For the U.S. airlines, the numbers are small enough to be considered inconsequential. Only 1.3% of United’s ASKs touch Canada, with all other airlines seeing lower exposure.

¿Qué pasa con México, you ask?

Mexico is different. While Canadian snowbirds visit the U.S., American snowbirds visit Mexico. The vast majority of travel between the U.S. and Mexico consists of American tourists. That point-of-sale advantage to the U.S. is demonstrated by the dominance of U.S. carriers in the market.

American, United, and Delta all operate at least three times the capacity into Mexico compared to Canada. Still, however, there is a substantial flow of travel from Mexico northbound. Volaris holds the second place for most capacity across the border, representing over 35% of the airline’s total capacity.

Yet, Mexicans traveling north are quite different from Canadians traveling south. Notably, the northbound Mexican passenger is more likely to be visiting friends and relatives than going on vacation, meaning the power of any travel boycott is both less likely and less powerful. You can change your vacation, but you can’t change your family. (If anyone figures out how to achieve the latter, please let us know.)

But for Canada, the unintended consequences of tariff threats could have a drag on travel to the U.S. While a show of solidarity by the Canadians, it will also disproportionately hurt Canadian airlines. However, it will also hurt the local economies in the U.S. that rely on Canadian travel.

It remains to be seen how impactful the travel boycott will be. It is still too early to see the effects of book-away in our datasets; however, the airlines have a real-time view. Somewhere, it is known how impactful the book-away is for Canadians. Our sense is that the longer it takes for an airline to talk about it, the worse it probably is.

It is also our sense that the world is currently nuts. Economies rely on stability and trust, ultimately driven by the very people choosing what to buy in grocery stores and where to travel (or if to travel). Smaller moves than are threatened today have resulted in serious economic downturns.

In the global game of complex interconnected economies, things can spiral quickly. “Spiral to what” is the appropriate question.

Visual Approach Public Service Announcement: Check your hedges, folks.

Pop Quiz - top international markets

We’ve discussed travel between the U.S., Canada, and Mexico, but how does this international travel compare with other country pairings? Travel between the U.S. and Mexico is second, followed by the U.S. and Canada, but another pair exceeds both.

Give up? You can find the answer here: answer.

Our published research

The most misunderstood sector in aviation: the ‘regional’ airlines

This is the second time you’re seeing us this week. It was an abnormal level of free from us (we also published our premium research).

In case you missed it, the analysis of the most misunderstood sector in aviation can be found here.

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