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US and Mexico markets soar as Canada plays catch-up

US and Mexico markets soar as Canada plays catch-up

The US and Mexican markets have set themselves apart for their fast-paced growth during the all-important second and third quarters of 2024, boasting record capacity volumes and outstripping their pre-pandemic performance. Mexico becomes North America’s fastest-growing market during the summer, while Canada will be the only of the three yet to reach its 2019 record.

According to analysis of data provided to Cirium, the North American market has a record 823,349,178 seats during Q2 and Q3, up 6.8% on the same period in 2019. The US accounts for the overwhelming majority of the continent’s capacity at 723.1 million seats, followed by Canada with 75.2 million seats, and Mexico with 71.2 million of available capacity.

Compared to the previous two summer quarters in 2019, the US market will grow by 7.5%, while Mexico’s growth rate stands at a notable 15%, adding an extra 10 million seats. Canada, which was on course to surpass its pre-pandemic figures, has been hit by the grounding of Lynx Air, wiping 1.7 million seats off the market, resulting in the country’s capacity levels contracting 1.3% on five years ago.

Although the threat of a global economic recession has, for the moment, receded and interest rates and inflation have both passed their recent peaks, supply chain bottlenecks and the availability and cost of key commodities, manufactures and skilled personnel continue to create headwinds in the aviation sector.

Biggest North American Airlines Q2 and Q3 2024

Canada’s low-cost sector hits turbulence

Canada’s low-cost segment has recently been shaken by the financial collapse of start-up Lynx Air after an initially promising launch. The now-defunct carrier cited stiff competition and “compounding financial pressure” as factors contributing to its demise. The airline had 1,676,808 seats on the market in Q2 and Q3 of this year.

Another Canadian LCC, Flair, has also been forced to cut down on capacity due to aircraft delivery delays and hefty debts. The airline has 2,863,350 seats on offer during the second and third quarters, down 6% year-on-year. Its expansion plans have been put on hold for at least a year.

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US carriers command majority of North America’s capacity

The five biggest airlines in North America this summer – American, Delta, Southwest, United, and Alaska Airlines, 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.

Buoyed by improved consumer confidence in the US and the continued strong demand for leisure travel, the ULCC Frontier continues to grow rapidly, increasing its capacity by over 80% on 2019.

On the other hand, Spirit has been forced to halt large-scale expansion, as it contends with a negative financial outlook and the grounding of some 40 A320neo aircraft due to Pratt & Whitney GTF engine issues, forcing the jets to undergo inspections. While it still boasts impressive growth on five years ago, its rate of expansion has slowed compared to recent years.

Largest North American markets Q2 and Q3

Mexico closes in on Canada as continent’s second-largest market

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

The growth on the Mexican market would have been even more pronounced had LCC Volaris not faced similar engine issues to Spirit in the US. The Mexican carrier has been forced to ground 17 planes over the summer. To manage costs, it has also laid off 200 employees. The grounding of aircraft and the subsequent capacity reduction have hindered Volaris’ growth potential compared to previous years.

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