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US and Mexico lead North America’s robust recovery

North America News 2024

The North American market will see a full recovery during the all-important and busy second and third quarters of the year when compared to the pre-pandemic 2019, with the US and Mexico fuelling the strong growth in airline capacity. In contrast, Canada continues to lag its two counterparts.

According to analysis of data provided to Cirium, the North American market has a record 812,256,987 seats during Q2 and Q3, up 5.4% on the same period in 2019. The US accounts for the overwhelming majority of the continent’s capacity at 711,068,820 seats, followed by Canada with 75,019,724 seats, and Mexico with 71,694,376 of available capacity.

Compared to the previous two summer quarters in 2019, the US market will grow by 5.7%, while Mexico’s growth rate stands at a notable 15.9%. Canada, which was on course to finally surpass its pre-pandemic figures, has been hit by the grounding of Lynx Air, wiping 1.7 million seats off the market, and resulting in the country’s capacity levels contracting 1.5% on five years ago.

Largest US carriers hold 65% of North America’s capacity

The five biggest airlines in North America this summer – American, Delta, Southwest and United – will hold a whopping 65% of the continent’s capacity. All of them will boast a record number of seats on the market, outstripping their pre-pandemic performance.

It comes as smaller US airlines work to build scale in an attempt to better compete against their rivals. However, JetBlue Airways will be forced to reduce its capacity levels by 1.6% on 2019 after its Northeast Alliance with American unravelled. The carrier has also seen its proposed merger with Spirit blocked by the courts over competition concerns, although it is appealing the decision.

Spirit and its fellow ULCC Frontier have been battling a negative financial performance but will offer more seats on the market, buoyed by improved consumer confidence in the US and the continued strong demand for leisure travel.

North America Airlines Q2 and Q3 2024

Canada impacted by Lynx Air grounding

Canadian ULCC Lynx Air ceased operations in late February citing rising costs, high fuel prices, and the difficult economic and regulatory environment as factors for its closure. The airline had 1,676,808 seats on the market in Q2 and Q3 of this year.

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Air Canada and WestJet have both maintained their leading positions in Canada, albeit both have less capacity than five years ago. Air Canada will shed 3.8 million seats this summer compared to 2019, while WestJet, once North America’s ninth-largest airline, is now thirteenth with 5.9 million fewer seats than prior to the pandemic.

The pair have taken measures to rectify the downturn. Air Canada has joined other North American airlines in experiencing strong trans-Atlantic demand and has also entered into a partnership with Emirates to broaden its network depth. Furthermore, it has expanded with its own metal into the Indian market.

WestJet has decided to shutter its ULCC subsidiary Swoop and fold its operations back into the mainline. The company, which has also acquired Sunwing, has similarly opted to incorporate the brand into WestJet.

Mexico market sees unprecedented growth

Mexico overtook Canada as North America’s second-largest market over the winter. Although it still has less capacity during the summer months, it is expected to overtake Canada in the coming years based on existing trends.

Several factors have played in favour of the rapid development of Mexico’s aviation market over the past five years. The country was one of the few in the world to have almost no travel-related restrictions during the pandemic, welcoming travellers from across the world. Its robust economy, low unemployment and a strong peso have also generated growing domestic demand.

The fast growth of LCCs VivaAerobus and Volaris have helped Mexico’s aviation sector reach record capacity. This summer VivaAerobus will have an additional nine million seats on the market compared to 2019, while its rival Volaris has added an extra three million seats.

The country’s national carrier, Aeromexico, will see capacity rise 20.5% on 2019, with some 15.5 million seats on the market this summer. However, its planned strong growth could still be impacted after the airline started scaling back its schedule to the US following a tentative ruling from the US Department of Transportation not to renew antitrust immunity for Aeromexico’s transborder joint venture with Delta. The development is a setback for both airlines, which have benefited from close cooperation since their joint venture began in 2017. As a result, Aeromexico is expected to reduce capacity to the US by approximately 6%.

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