BUSINESS

Weak Dollar Hurting Cross-Border Flying: U.S. Airports

10/27/2015 10:16 EDT | Updated 10/27/2016 05:12 EDT
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MONTREAL — The weak Canadian dollar isn't just hurting cross-border shopping.

U.S. airports that enjoyed a surge in the number of Canadian passenger levels when the loonie was valued higher than the American dollar are now seeing the flip side of currency swings.

Low ticket prices drew about five million Canadians annually in recent years to fly out of U.S. airports.

But the Burlington International Airport in Vermont estimates the number of Montreal passengers is down about 10 per cent so far this year.

Gene Richards, the airport's aviation director, said he's surprised the drop-off hasn't been greater, adding convenience and the lure of lower taxes may be limiting the currency impact.

"I think we're all challenged a little bit...(but) we certainly look forward to the day when things turn back and it's a better deal for Canadians."

The number of Canadians travelling south fell by five per cent again in August, marking the 11th monthly decrease in a year. Stateside travelling is 26 per cent lower than a year ago, according to Statistics Canada. Same-day car trips are off 34 per cent while total car trips are down 24 per cent.

Bellingham International Airport in Washington State said it experienced a 25 per cent decrease in Canadian airline passengers in September as fewer people cross the border from British Columbia.

"We believe the decline in the Canadian dollar has a direct impact on the number of people travelling through the airport," said aviation director Mark Leutwiler.

However, he expects demand will pick up when Alaska Airlines begins direct flights Nov. 1 to Hawaii and Las Vegas from Bellingham.

Buffalo International Airport, the closest major U.S. airport to Toronto, didn't return calls seeking comment.

However, Plattsburgh Airport — which describes itself as Montreal's U.S. airport — said its business is down only slightly.

"There's a bit of softness but nothing out of the order that you'll hear elsewhere," said Garry Douglas, president of the North Country chamber of commerce, which is in charge of the airport's marketing.

He attributed that to the historic bonds between the Montreal area and the New York State municipality that has long been a destination for cross-border shoppers.

"There's just a substantial built-in difference that more than overwhelms any shifts in currency," he said.

About 85 per cent of Plattsburgh's 150,000 passengers a year come from Quebec. The airport is undergoing a $55-million expansion that will quadruple its capacity by early 2017.

The airport, currently serviced by Spirit, Allegiant, PenAir and Caesar's Entertainment charter service to Atlantic City, expects to snag additional carriers, including Canadian tour operators that could fly to sun destinations popular with Canadians like the Dominican Republic, Cancun and eventually Cuba.

Douglas wouldn't identify potential airlines, but Sunwing's service to Cancun and Punta Cana which started last year from Buffalo could be a model.

Canada's airline sector has long called upon Ottawa to lower airport rents, fees and taxes to stem the flow of passengers crossing the border to catch flights.

The National Airlines Council of Canada says there is a "competitive gap" stemming from government policy that treats the industry as a source of revenue. Canada has the fifth highest ticket and airport charges out of 140 countries, according to the World Economic Forum.

Ahead of their electoral victory last week, the federal Liberals said they would "look at ways" to help the Canadian airline industry be more competitive.

But American airport operators said any changes likely wouldn't be large enough to have a real impact on traveller behaviour.

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