As Canada’s airlines suspend flights to Mexico and the Caribbean, U.S. carriers including Delta Air Lines and American Airlines say they have no plans to stop offering service to sun destinations, raising questions about both the business fallout for domestic airlines and the measure’s effectiveness for slowing the spread of COVID-19.
Canadian airlines have already been losing market share over the last several months to foreign carriers, said Mike McNaney, president and CEO of the National Airlines Council of Canada. Now, however, the only routes available to certain destinations will be aboard foreign airlines selling flights with stopovers in U.S. cities.
“We assume the government is also engaging foreign operators on this issue to ensure we are all taking the same concerted approach,” McNaney said. Transport Canada didn’t respond to a request for comment.
Canadians flying out of major cities will still be able to book trips to Mexico and the Caribbean as normal, provided they are willing to stop over at another airport. American and Delta, for example, are selling tickets for flights from Toronto to Cancun, with passengers connecting through U.S. cities such as Atlanta, Charlotte, N.C., and Philadelphia, Pa., an online search shows.
American Airlines said Monday that it had no schedule changes to share. Delta said it would suspend its flight from Minneapolis to Winnipeg as of Feb. 3, in keeping with government restrictions limiting which airports can receive international flights, but planned to continue its scheduled service to Canada.
Prime Minister Justin Trudeau said Friday that Canadian airlines had agreed to suspend flights to Mexico and the Caribbean until April 30, in an effort to combat the spread of COVID-19 in Canada. The prime minister announced the suspensions along with stricter measures aimed at reducing international travel, including a requirement that entrants to Canada quarantine in a hotel at their own expense.
On Monday, Bloc Quebecois Transport critic Xavier Barsalou-Duval highlighted the fact that U.S. airlines were still offering flights from Canada to sun destinations, saying in a statement that the latest round of suspensions put Canadian companies at a disadvantage.
Asked why Canadian airlines suspended routes while American carriers continue to operate flights to the same destinations, WestJet spokeswoman Morgan Bell said Transport Canada would have to clarify.
“Recognizing that air travel represents less than two per cent of the transmission of COVID, the government asked us to stop flying to these destinations out of an abundance of caution, and we agreed,” Bell said.
The new restrictions were announced weeks after Canada implemented a requirement that all air passengers travelling to Canada produce evidence of a negative COVID-19 test taken within 72 hours of departure.
The testing mandate caused an immediate drop in flight bookings, airlines said, leading to additional layoffs. With the latest restrictions, experts say they expect further layoffs, along with potential bankruptcies, if government aid for the sector doesn’t materialize.
The suspensions of flights to sun destinations will cost Air Canada, the country’s largest carrier, around $200 million in lost revenue between now and April 30, industry analyst John Gradek said.
The flights that Canadian airlines continue to offer include trans-Atlantic and trans-Pacific routes along which carriers transport cargo, a business that has become increasingly important to airlines’ bottom lines as revenue from passenger sales dries up.
U.S. airlines such as Delta and American have received tens of billions of dollars in federal aid since the start of the pandemic. The government stimulus passed by the U.S. Congress in March 2020 included US$25 billion in payroll support for the industry, US$25 billion in loans for passenger airlines and more than US$10 billion in grants and loans for cargo airlines and aviation contractors.
Airlines in Canada, meanwhile, have been in negotiations with the government for months about the terms of a sector-specific aid package, with Ottawa saying that any federal funding for airlines would be contingent on their issuing full refunds to passengers who had their flights cancelled during the pandemic.
Canada’s airlines have still received hundreds of millions of dollars in aid from the Canada Emergency Wage Subsidy, a federal spending program that helps cover a portion of companies’ payroll costs during the pandemic.
This report by The Canadian Press was first published Feb. 1, 2021.
It's a key week for the stock market. If you're not nervous, you should be, this global strategist warns. – MarketWatch
Investors have got the jitters as a big week unfolds — several central bank meetings including the Fed, earnings from Apple and Amazon.com, and jobs data. Yikes.
Any investor out there who isn’t nervous, perhaps should recheck his gut, says our call of the day, from Standard Chartered’s global head of research, Eric Robertsen.
“We do not expect an extreme economic hard landing, but we think the proverbial Goldilocks scenario is too optimistic,” Robertsen told clients in a Sunday note, adding that they are “now turning cautious on risky assets.”
Robertsen explains the two sides of an important market debate right now — the just-right Goldilocks crowd and the “recessionist” bears.
The former is growing confident with their view that inflation and central bank tightening is nearing a peak and any recession will be “shallow and short-lived,” he explains. The reduction of that “central-bank driven left-side tail risk” matters more to markets than any slowdown, that side also says.
“A central bank pause, declining inflation, and attractive yields and valuations will prompt investors to reduce their underweight exposure and increase their allocation to risky assets, the Goldilocks camp argues,” he said.
He says the varied year-to-date performance across asset classes reveals 2022’s laggards are 2023’s outperformers so far. “This suggests that short-covering may be a significant contributor to performance so far, rather than overwhelming faith in the Goldilocks economy.
“The outperforming sectors are distinctly pro-cyclical – which is surprising with recession themes all the rage,” he says, noting that “ominous message about the health of the labor market” from tech job cuts.
On the other side, the bears say investors are overstating a decline in volatility and understating economic risks, writes Robertsen, who is on board here, hence his caution on riskier assets. The so-called fear gauge, the CBOE Volatility Index, or VIX
didn’t register new highs last year when stocks tumbled, leading some to say it was a broken indicator.
“Real-time indicators are showing a loss of economic momentum, while others – such as the U.S. labor market – have yet to reflect growing economic headwinds,” he said. “Underlying the bear case is the view that we have yet to feel the full cumulative impact of the most aggressive monetary tightening cycle in decades.”
He says “volatility measures have fallen too far and the improvement in risky assets is due for a pause.” The catalyst for this pause could be any number of things: aggressive rate cuts priced into the U.S. money-market curve that will be unwound, a too-tight move from the European Central Bank or even an actual tightening from Bank of Japan, for example, said Robertsen.
Risk assets may also struggle with the Fed’s message this week if it fails to reassure the rate-hiking cycle is complete, says Robertse,n who expects the central bank will push back on “aggressive easing priced into the money-market curve.”
creeping up and oil
pulling back. The China CSI
rose slightly as the market reopened after a week off. The Hang Seng
slumped 2.7% as Alibaba fell (more in buzz) and Taiwan’s index
surged 3.7% as Taiwan Semi
For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily. Also check out MarketWatch’s Live blog for up-to-the-minute markets updates.
The A-listers of earnings are lining up this week, with not just Apple
but Alphabet’s Google
are tracking a slump in Hong Kong amid speculation the company will shift headquarters to Singapore. Alibaba dismissed the rumors. And shares of Baidu are bucking a weaker landscape for tech, with reports the China tech group is developing its own AI search engine.
Russia’s invasion of Ukraine will lead to lower oil and gas demand and a move to greener sources, says BP
The data calendar is quiet for Monday, but the week is busy with updates on the housing market, manufacturing, unit labor costs and nonfarm payrolls.
A 25-basis point hike is forecast from the Fed this week, while a 50-basis point cut is expected from the ECB and Bank of England, which could narrowing the differential between the two sides.
Best of the web
A short seller report has now wiped $72 billion in value from companies of the world’s number-eight billionaire.
Who gives the best retirement advice? Suze Orman and Dave Ramsey or economists?
Rio Tinto is looking for a lost radioactive capsule the size of a coin in Western Australia.
We are ‘greening’ ourselves to extinction, says this Dutch academic.
These were the top-searched tickers on MarketWatch as of 6 a.m. Eastern:
|Lucid Group I|
|AMC Entertainment Holdings preferred shares|
|Bed Bath & Beyond|
|AMC Entertainment Holdings|
Ain’t no greased pole greasy enough for Philadelphia Eagles fans celebrating that NFC win over the San Francisco 49ers.
But lighting up the Empire State Building in Eagles green was a step too far, some New Yorkers were fuming.
Boris Johnson says Russian President Vladimir Putin threatened to take him out as the war in Ukraine began.
Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.
Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton
Why the golden age of flying is never coming back — and it might not be a bad thing – Yahoo News Canada
From pricey parking to pat downs at security and long lineups everywhere you turn, air travel these days can be unpleasant.
“I get on a plane now at least once a month and to me, it’s like riding on a bus in the sky. Herd me on, sit me down, get me off. They’ve taken away the lure of the travel,” said Susan Barnes, 75, of Halfmoon Bay, B.C., who has been a frequent flyer for more than half a century.
Barnes, who was a flight attendant in the 1960s and ’70s, says she remembers when flying was like a Mad Men cocktail party in the sky. She jetted around the globe pouring free champagne for passengers flying CP Air, a carrier that operated until 1986 when it was taken over by Pacific Western Airlines (PWA) and then, Canadian Airlines.
Barnes said her job was to provide top notch treatment to every passenger, even those sitting in economy. That meant handing out hot towels before and after every meal. Breakfast, lunch and dinner were served on real china, with silverware and cloth napkins — then out came coffee, tea and a fruit basket.
“We were treating these people as if they were in a first-class establishment. We just happened to be in the air,” Barnes said.
Barnes and other retired CP Air, Canadian and Air Canada flight attendants interviewed by the Cost of Living described flying back then as “a pleasure.”
It’s a far cry from the experience thousands of Canadians had with airlines this past holiday season. Staff shortages, weather issues and computer outages resulted in lost baggage, cancelled flights and stranded passengers who are now battling air carriers for compensation.
If you’ve been caught in that tangled web of travel chaos, you may be asking yourself what happened. Experts say it comes down to costs, and competition — and that we’re unlikely to ever return to that golden age of flying.
Keeping prices competitive meant airlines had to be more ruthless about the bottom line, said Fred Lazar, an associate professor of economics at York University.
“Here’s a fare, it gets you a seat from A to B. Anything else costs more.”
What most Canadians remember as the golden age of flying was the era when commercial aviation was regulated, explained Lazar. It was a time when airlines didn’t have to cut costs to stay competitive, because the federal government didn’t allow them to compete with one another.
“So it was essentially the government saying this is where you can fly, when you can fly and these are the prices.”
Up until 1986, the two big players were private carrier CP Air and government-owned Air Canada (formerly Trans-Canada Airlines), said Lazar, and the government did not allow much overlap on routes.
In the absence of competition, experts say Canadian carriers were guaranteed to attract customers and make money, which meant they could afford to offer perks on their flights to passengers.
According to Julie LeBlond Parker, who started as a flight attendant for CP Air in 1968, airlines also invested in their staff. She received extensive training in “decorum” and “finesse” before taking to the sky.
“The service was based on old European service. It was a very high standard,” said LeBlond Parker, who now lives in South Surrey, B.C.
Domestic and international flight prices, 1959 vs. 2023
But the golden age of air travel was also out of reach for many Canadians. Fare schedules from collectors and the archives of the Canada Aviation and Space Museum reveal that throughout the 1940s, ’50s and ’60s, flying was incredibly expensive.
In 1950, a return flight on Trans-Canada Airlines from Vancouver to Johannesburg, South Africa, cost over $21,000 when adjusted for inflation. Flying Toronto to Vancouver in 1962 on CP Air was roughly $1,900.
With prices like that, LeBlond Parker, said the regulars on her flights were business travellers, not vacationers. Leisure travellers were usually newlyweds, couples and families embarking on a once-in-a-lifetime trip.
“What was really amazing about it is that they all dressed up. They probably got a new outfit just to fly because it was special. It was a very special thing.”
Goodbye blankets, hello bargains
Barry Prentice, the director of the Transport Institute at the University of Manitoba, said Canadians saw a “tremendous drop” in airfares south of the border when the U.S. deregulated its airlines in 1978.
“They went from $700 to $200, or something. And everybody in Canada was sitting there, you know, wondering, ‘well, why don’t we have that?'”
WATCH | Is air travel broken?
Prentice said the Canadian government followed the U.S., loosening its grip on the airline industry throughout the 1980s and ’90s. During that time, Air Canada became privatized and more carriers entered the Canadian market. As competition ramped up, airfares went down.
But that’s not the only reason flying became cheaper, explained Prentice.
Advances in aviation technology meant planes became more fuel efficient and larger, which increased air cargo and passenger capacity. Prentice said that — along with the 1980s oil glut, brought down the price per seat.
Even when crude prices rebounded, legacy airlines like Air Canada couldn’t go back to charging passengers as much for flights as they did before deregulation because they were up against the à la carte pricing model of no-frills carriers, said Lazar.
“Many people said, ‘We didn’t have to pay for bags, we got food for free, we didn’t have to pay for earphones,” Lazar said.
“Well now, in the lowest-fare categories, you do, because the airlines want to compete with the ultra low-cost carriers. And that’s the only way they can do it.”
Lazar, who has also worked as a consultant for Qantas, Air Canada and Porter Airlines, said stripping away the luxuries and packing more seats on planes is a “major contributing factor to making flying in economy much less comfortable and attractive, yet much more affordable.”
Snafus at security
While Canadians often blame airlines for a lousy flying experience, chaos at airport security and gates can also contribute to the overall unpleasantness of air travel. Experts say that’s because airports aren’t designed for the realities of today’s travel.
Between 1973 and 2008, Anthony Wade-Cooper was a flight attendant for CP Air, Canadian and Air Canada. He says before 9/11, he could make it from the check-in counter to the gate in 20 minutes.
“It was just so different. You just walked into the airport and you got on a flight,” he said Wade-Cooper, who is now retired in a town called Mooloolaba on Australia’s Sunshine Coast.
Nowadays, airlines ask passengers flying domestic to arrive at the airport two hours in advance and Wade-Cooper said he often spends most of that time standing in a queue.
Security snafus are also a result of a steady increase in air travel over the last decade — peaking in 2019 with nearly 163 million passengers passing through Canadian airports, according to Statistics Canada.
According to Lazar, most airports were not built for a post-9/11 world where every traveller has to take off their belt and shoes. There are also design problems when passengers arrive at gates. Lazar says some airports are designed like malls — a lot of shops and restaurants but not a lot of seating.
“There’s no place to sit. You know, if you have long delays, where are you going to go?”
But what we get in exchange for fewer perks and busier airports, said Prentice, are cheaper flights — and that means more people than ever can afford to fly. Which he thinks is a “really good thing.”
“More families can travel and, over time, families have split up wider and wider. My grandchildren are in Montreal and I’m in Winnipeg and I wouldn’t see them very often if it weren’t for air travel.”
If you’re wondering if there’s a way to get back a bit of the elegance or at least the enjoyment of flying, Lazar said you can’t expect to pay rock bottom prices.
He said the only way back to the golden age of travel is to fly first class or rent a private jet.
“Otherwise, just accept the fact that air travel is really the same as travelling on a bus. Except it gets you from A to B much more quickly.”
Stock futures are little changed ahead of busy week of earnings, Fed meeting – CNBC
Stock futures were modestly lower on Sunday evening as investors geared up for a week of key corporate earnings and a possible interest rate hike from the Federal Reserve.
Futures tied to the Dow Jones Industrial Average slipped 56 points, or about 0.2%. S&P 500 futures ticked down 0.2%, and Nasdaq 100 futures edged lower by 0.2%.
Wall Street is coming off a winning week as the stock market’s January rally continued. The Nasdaq Composite gained 4.3% for the week, while the S&P 500 and Dow added 2.5% and 1.8%, respectively.
There are several tests this week for this 2023 rally. A busy stretch of corporate earnings season includes reports from McDonald’s and General Motors on Tuesday followed by tech giants Apple, Meta Platforms, Amazon and Alphabet later in the week.
The Federal Open Market Committee meets on Tuesday and Wednesday, when the Fed is expected to hike rates by one-quarter of a percentage point. Investors will be looking for clues about how much higher the central bank will take rates in the fight against inflation.
“Inflation has shocked the Fed to the upside; they need to be cautious not to inadvertently lower rates too early. Don’t buy into this gobbledygook about a couple of rate cuts being priced into December. For now, the Fed is only around to help in the very unlikely event of a crash landing,” David Zervos, chief market strategist at Jefferies, said in a note to clients.
Power Crisis Triggers Water Cuts in South Africa’s Economic Hub – BNN Bloomberg
Russian teen faces years in jail over social media post criticizing war in Ukraine – CTV News
Maple Leafs’ Morgan Rielly calls his shot on John Tavares’ big night – Sportsnet.ca
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Search for life on Mars accelerates as new bodies of water found below planet’s surface
Economy23 hours ago
Amid economic turmoil, Pakistan hikes up fuel prices
Business21 hours ago
Move over, BCE and Rogers. Investors have a new telecom favourite
News20 hours ago
Where did B.C.’s beloved Nanaimo Bar come from?
Business20 hours ago
Bed Bath & Beyond falters in effort to find buyer in bankruptcy
Investment22 hours ago
3 reasons dividend stocks can lead the next bull market
Tech21 hours ago
Kenji Studio Cancels Kickstarter for English Release of Santa Company Anime Film
News21 hours ago
Canada in ‘better shape’ than predicted in face of XBB.1.5, expert suggests
Art23 hours ago
Inuvialuk sculptor David Ruben Piqtoukun’s work shaped by cultural stories