If you’ve tried to book a flight in Canada lately, you’ve probably noticed: prices are up. And not just slightly. Routes that cost $350 CAD round-trip last year are now closer to $420–$500. What’s driving this? Two forces are colliding at once — fuel costs and trade disruption — and Canadian travellers are caught in the middle.
The Fuel Factor: Jet Fuel Doesn’t Follow the Pump Price
Most people assume that when gas prices drop at the pump, airline tickets should get cheaper. The reality is more complicated. Airlines use jet fuel, not regular gasoline, and the two prices don’t move in lockstep. Jet fuel is refined separately, trades on global commodity markets, and often responds differently to geopolitical events.
In early 2026, global crude oil prices have been volatile due to ongoing Middle East tensions, OPEC production decisions, and currency swings. Canadian airlines — Air Canada, WestJet, Flair, and Porter — all hedge their fuel costs (buying fuel futures in advance), but these hedges eventually expire. When they roll into new contracts at higher prices, the cost gets passed to passengers through fuel surcharges, which now routinely add $60–$120 to a transatlantic ticket.
How Much Does Fuel Actually Cost Airlines?
Fuel typically represents 20–30% of an airline’s total operating cost. In periods of price spikes, that number can push above 35%. Here’s a rough breakdown of what goes into your ticket price on a typical Air Canada YYZ → LHR (Toronto–London) flight:
- Fuel surcharges: $90–$140 CAD
- Airport fees (nav Canada, landing fees): $60–$90
- Taxes (Canadian ATSC, UK APD): $80–$110
- Airline base fare: $200–$350
- Total: often $430–$690+ CAD
When fuel costs rise 15%, airlines don’t absorb it — they pass it on.
The Tariff Effect: US–Canada Trade Tensions in 2026
The second major factor is something most travellers don’t connect to flight prices at all: trade policy. With the return of broad US tariffs on Canadian exports in 2025–2026, the Canadian dollar weakened relative to the US dollar. Since most international airfares are quoted in USD, a weaker CAD means Canadians effectively pay more — even if the USD price stays flat.
For example: if a flight costs USD $299 and the CAD/USD rate moves from 0.76 to 0.71 (as it did in early 2026), the CAD cost jumps from ~$393 to ~$421 — a 7% increase with no change in the underlying price.
Aircraft leases and maintenance contracts are also dollar-denominated. Boeing and Airbus parts, many crew training programs, and international navigation fees are all priced in USD. As the loonie weakens, airline costs rise across the board — not just fuel.
Which Routes Are Most Affected?
Domestic (within Canada): These routes are least affected because costs are primarily in CAD and competition between Air Canada, WestJet, Porter, and Flair has kept prices relatively stable — though still up ~8–12% year-over-year.
Transborder (Canada–US): These routes price in USD, so CAD depreciation hits directly. Routes like YYZ–JFK, YVR–LAX, and YYC–LAS are notably more expensive in CAD terms.
Transatlantic (Canada–Europe): These routes carry the full double burden: USD pricing plus heavy fuel surcharges. London, Paris, and Rome are all significantly more expensive than 2024–2025 prices.
Sun destinations (Mexico, Caribbean): Still among the best value routes from Canada. Mexican peso weakness has kept all-inclusive prices competitive, and Cancún, Los Cabos, and Puerto Vallarta remain popular for a reason.
What Can Canadians Do About It?
Despite the pressures, there are still ways to get good value:
1. Book domestic or Caribbean flights. The CAD price impact is lowest on routes within Canada or to peso-denominated destinations. Cancún, Puerto Vallarta, and Punta Cana are still excellent value.
2. Set a fare alert. Tools like Fareseeker track prices daily. Even in a high-price environment, airlines run flash sales — but they disappear within 24–72 hours. Alerts catch these.
3. Fly mid-week. Tuesdays and Wednesdays are still consistently 10–20% cheaper than Friday/Sunday flights on the same route.
4. Compare budget carriers. Flair and Porter operate on different cost structures. Even with fuel increases, their base fares often undercut Air Canada and WestJet by 25–40% on domestic routes.
5. Be flexible on dates. Shifting your trip by even a week or two can sometimes mean a $100–$200 saving. Use flexible date search tools to see the full price calendar.
When Will Prices Come Down?
Honestly, not soon. Airlines have locked in pricing for summer 2026 based on current fuel cost projections. The best near-term hope is a strengthening CAD (if trade tensions ease) or an unexpected drop in crude oil prices. Longer term, the arrival of more fuel-efficient aircraft (like the Boeing 737 MAX and Airbus A321XLR) will help reduce per-seat fuel costs — but that’s a multi-year transition.
The smart move right now is to book strategically, not reactively. Waiting for prices to fall often means they’ve already risen further. If you see a deal that works for your budget, it’s worth locking in.
Use the Fareseeker deals page to monitor daily prices from your home city. We track hundreds of routes every day and flag genuine deals — not just normal prices dressed up as sales.
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