MONTREAL — Canada's air transportation industry is expected to earn healthy profits over the next five years despite a continuing decrease in airfares, according to a new report from the Conference Board of Canada.
The agency anticipates airlines and travel companies will earn nearly $7.5 billion in pre-tax profits over the next five years, more than twice that in the period between 2000 and 2015, which included the global financial recession.
A WestJet Airlines aircraft leaves the gate as an Air Canada Jazz passenger jet taxis to position, at the Vancouver International Airport. (Photo: Adrian Brown/Bloomberg via Getty Images)
The sector earned a record $1.56 billion in estimated pre-tax profits in 2015, up 31 per cent in one year and more than double the $685 million earned in 2012.
"The skies have rarely been as bright for Canadian air travel as they were in 2015," said the board said in its report released Wednesday.
Revenues were $25.8 billion last year and are expected to reach $31.7 billion in 2020.
"The combination of booming demand for air travel and the drastic reduction in material costs has proved to be the most positive event to strike the industry in a very long time," it said.
"The skies have rarely been as bright for Canadian air travel as they were in 2015."
Although profits are expected to remain well above pre-2015 levels, the board they should dip roughly 2.5 per cent annually in the coming years as companies deal with the threat of new low-priced competitors and higher costs, before recovering in 2020.
Airline profit margins are expected to decrease as revenues are partially offset by increased costs, including a forecasted nearly two-thirds increase in fuel prices between 2016 and 2020.
Weaker loonie altering travel plans
Meanwhile, the board said the weaker loonie has altered travel patterns.
Fewer Canadians are travelling from nearby U.S. airports and the number of Canadians travelling to the U.S. is down. Visits by Americans to Canada are up as are the number of international travellers flying to Canada.
The number of Canadians flying overseas has increased by 33 per cent since 2010, including a 10 per cent gain in 2015.
Airlines have responded by adding offshore capacity. WestJet (TSX:WJA) will start flying large planes to London Gatwick this summer while Air Canada (TSX:AC) is adding Casablanca and four European destinations.
"Healthier international demand, coupled with the fact that Canadian airlines can now tap more foreign markets than ever before, will provide the final piece that solidifies the industry's expansion over the next five to six years," the Conference Board said.
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Cheapflights reveals some cost-effective ways of getting to and from major airports, kicking off with Canada's busiest airport, Toronto Pearson. There are several ways to make your way to Toronto Pearson depending on how much time you have and how much you want to spend. The TTC (Toronto’s public transit system) offers a cheap option but involves schlepping your suitcase onto a bus and subway. That said, $3 CAD is pretty cheap when it comes to airport travel. Your options are as follows: 192 Airport Rocket from Kipling Station, 307 Eglinton West from the intersection of Yonge and Eglinton, 300A Bloor-Danforth from the Bloor-Danforth corridor and the 52A Lawrence West from Lawrence West and Lawrence Stations. You can also take a GO Bus (slightly more comfortable than a TTC bus) to Terminal 1 from York Mills or Yorkdale Station. A more comfortable and quicker option is the Union Pearson Express, which speeds you between downtown Toronto’s Union Station and the airport in just 25 minutes, with trains departing every 15 minutes, from 5:30 a.m. to 1 a.m. A one-way fare is $27.50 CAD. Image: Philip Tellis, Airport via Flickr CC BY-SA 2.0
As one of the major world airports, Heathrow has great connection to bring you to and from Central London. There are several options and they all vary by price, convenience and duration. If booked well in advance, easyBus service is the cheapest form of transport. Buses travel between Heathrow Airport Central Bus Station located between Terminals 2 and 3 and Shepherd’s Bush or Waterloo Station. When it comes to convenience, the London Underground comes to the rescue. With regular service to and from all terminals to Central London, you can get to the very heart of London (or any destination within the London transport network) an Oyster Card or one-way ticket. The duration is between 60 and 80 minutes, depending on the destination. Alternatively you can get the Heathrow Express train, which travels between Heathrow and London’s Padding Station. The ride lasts about 20 minutes and tickets booked 90 days in advance can cost as little as £6.99 one way and £21.50 when purchased on the day of travel. Image: Hugh Llewelyn, Heathrow Airport from the air via Flickr CC BY-SA 2.0
Getting between downtown Vancouver and Vancouver International Airport is relatively easy. YVR is located on Sea Island in Richmond, around 7 miles from the downtown area. YVR is the second busiest airport in Canada after Toronto Pearson. The best and easiest way to make your way to or from Vancouver International is via the convenient Canada Line Translink service that links YVR to downtown Vancouver and Richmond. Even more convenient is the fact that you can check in for your flight from several Canada Line stations. There are airport check-in kiosks at the following stations: YVR-Airport, Templeton, Bridgeport, Marine Drive, Broadway-City Hall, Olympic Village, Vancouver City Center and Richmond-Brighouse. Image: Ed Bierman, Vancouver airport via Flickr CC BY 2.0
Is the airport in Montreal in your travel plans? Where you are coming from (or are headed) will shape your transportation choice. The 747 bus line runs between the Montréal-Trudeau airport and the central bus station downtown 24 hours a day, seven days a week . Depending on traffic, the trip can take between 45 and 60 minutes and the cost is $10 CAD (which actually buys you 24 hours of service throughout the STM bus and métro network). If you are coming from (or going to) somewhere outside the city, there is a free minibus service available between the VIA Rail train station in Dorval and the Montréal–Trudeau Airport. There is also a line-up of regional shuttle services for the surrounding areas. Image: abdallahh, 747 Express Bus de l’aéroport via Flickr CC BY 2.0
There are several good options for making your way to or from Boston Logan International. Public transportation is an economical and eco-friendly choice, and there are multiple routes to choose from. The MBTA Blue Line stops at Airport Station, which is linked to all the airline terminals via a free Massport shuttle bus. Or use the Silver Line SL1, which can be accessed from the MBTA Red Line or Commuter Rail by transferring at South Station. You can also get to and from the airport using a more unconventional method – via a water taxi or ferry. MBTA ferries carry passengers back and forth from both the commuter boat terminal at Fore River Shipyard, 703 Washington Street in Quincy, and from Pemberton Point in Hull. On the Logan side, a free Massport Route 66 Shuttle Bus connects the ferry dock and all airport terminals. Image: Prayitno, Logan International Airport via Flickr CC BY 2.0
Hartsfield-Jackson is the busiest airport in the world with 94 million passengers each year. The easiest and most inexpensive option for traveling between downtown Atlanta and this airport is MARTA, the city’s transit system. The Airport MARTA station is in the domestic terminal of the airport, located at the end of the red and gold rail lines. Jump onto almost any southbound train to the airport (or northbound to head into the city). A one-way trip costs $2.50. Traveling internationally? No problem as a shuttle links the international terminal. Hours for MARTA are weekdays 5 a.m. to 1:00 a.m. and weekends 6 a.m. to 1:00 a.m. Image: Daniel Betts, Delta Air Lines McDonnell Douglas MD-88 via Flickr CC BY-SA 2.0
The Dallas Area Rapid Transit (DART) rail service makes for an easy and fairly convenient option for airport passengers. The DFW Airport Station is just outside Terminal A on the lower level. Take the Terminal Link if you are coming or going from Terminal’s B, C, D or E. DART operates from 4 a.m. to 1 a.m. seven days a week and the fare is $2.50. Image: Benny, the transportation via Flickr CC BY 2.0
If you are looking to avoid driving or a taxi when traveling via the airport in Orlando, your best options are local bus or by a train and bus combo. LYNX, the local transportation system, can easily whisk back and forth from the airport via routes 11, 42, 51, 111 and 436S. The fee is just $2. Another good option is the SunRail train, which also connects downtown Orlando and the airport via the The Sand Lake Road station. Catch the 11, 111 and 42 bus for travel between the airport and the SunRail station. One-way fares are $2 and there are transfers between the train and bus. Image: Rusty Clark, Orlando International Airport via Flickr CC BY 2.0
There are a few ways to get yourself to and from JFK when in the greater New York City area. AirTrain is an efficient and affordable option for connecting with MTA New York City Transit subways and buses as well as the Long Island Rail Road. The convenient service operates 24 hours a day, 365 days a year and reaches many connecting public transit services via two off-airport locations, Jamaica Station and Howard Beach Station. AirTran is a free way to get around the airport, connecting terminals, parking garages and rental car facilities. The fare to the MTA stations is $5. Another option for getting to or from JFK is NYY Airporter, the official bus operator for NYC area airports. The bus travels between Penn Station, Port Authority and Grand Central and JFK seven days a week from 5 a.m. to 11:30 p.m. daily. A one way trip is $17. Image: Shiraz Chakera, Getting the subway from JFK airport into NYC via Flickr CC BY-SA 2.0
There are many ways to travel between Barcelona-El Prat Airport and Barcelona city center as well as the surrounding Costa Brava and Costa Daurada areas. Other Spanish cities can be reached by rail services to or from the airport. Express bus service, also known as Aerobus Express, costs around $10 each way and it picks up and drops off outside terminals 1 and 2. You can also get a city bus to and from the center of Barcelona via bus route 46 or night bus N17 costing €5 for a single journey. RENFE train is a convenient way to get to and from the center of Barcelona within 30 minutes. You can catch the train from T2B, and if traveling from T1 you can get a free shuttle bus. It is highly advisable to get a T10 Metro ticket or Barcelona Card, which enables you to unlimited travel in Barcelona. If your destination is somewhere in Costa Brava or Costa Daurada, the best way to travel would be via a shuttle bus such as hoppa or suntransfer. Not only will these shuttle bus services drop you off or pick you up right in front of your hotel, they are also cheaper than getting a taxi. Shuttle bus services in Spain are very reliable and cost effective. Image: Sharon Hahn Darlin, Barcelona Airport, Spain via Flickr CC BY 2.0
You have several options for getting to and from LAX. For starters, there’s the LAX FlyAway bus, which provides round-trip service between each terminal at LAX and the following locations: Van Nuys, Union Station, Westwood, Santa Monica and Hollywood. If you’re leaving the airport, you can catch FlyAway buses on the Lower/Arrivals Level in front of each terminal. The fare is $8 ($10 to/from Westwood). You can also find other scheduled buses and shuttles providing service to and from other parts of LA on the Lower/Arrivals Level in front of each terminal. Public transportation is another good option. There is free shuttle bus service from the Metro Green Line Aviation Station. If you’re leaving the airport wait under the LAX Shuttle & Airline Connections sign on the Lower/Arrival Level islands in front of each terminal and then board the “G” Shuttle. A one-way fare on the subway is $1.75. Image: Moto “Club4AG” Miwa, LAX Airliners via Flickr CC BY 2.0
Shuttle buses can be your friend when traveling via Las Vegas International. There are a variety of shuttles that service most major Las Vegas hotels and resorts. They drop off and pick up at both Terminal 1 and Terminal 3. Book ahead to make sure you have a seat. The Regional Transportation Commission of Southern Nevada (RTC) also offers a good means of getting to and from the airport. Terminal 1 is served by Route 108, Route 109 and the Westcliff Airport Express (WAX) route. Terminal 3 is served by the Westcliff Airport Express (WAX) and Centennial Express (CX) routes. When leaving the airport you can purchase transit passes using the Ticket Vending Machines (TVM) located at the bus stops on Level Zero of Terminal 1 and 3. RTC fares start at $2. Image: Eric Salard, Las Vegas Airport via Flickr CC BY-SA 2.0