By air

The activities of commercial airlines operating in Canada have faced repeated challenges over the last few years. The terrorist attacks of September 2001 in the United States, the war in Iraq and the outbreak of the Severe Acute Respiratory Syndrome (SARS) in April 2003 have had a significant impact on the level of commercial airline activities in Canada. Combined with new security charges, increased fees (e.g., airport rents, navigation service charges) and more cumbersome security requirements at airports, the resulting downturn in demand for commercial air travel led to financial difficulties for most Canadian carriers directly involved in the commercial aviation sector in Canada.

In Canada, operating and financial statistics for the year 2001 provided the first signs of deterioration. From an operating point of view, Canadian air carriers reported a drop of 1.5 million enplaned passengers in 2001 (−3.0%), after seven consecutive years of increases. The decline in enplaned passengers was most noticeable in the Canada–United States transborder (−5.2%) and domestic (−3.4%) markets. Revenue passenger-kilometres (RPK), an indicator of the demand for air passenger services, decreased by 5% for all Canadian carriers and by 6% for Air Canada alone. From a financial point of view, Canadian air carriers reported a net loss of $828 million in 2001, compared with a loss of $84 million in 2000. Over the last 10 years, the Canadian air industry has lost $1.9 billion.

Commercial airline activities in Canada were already experiencing a significant downturn in the years preceding the terrorist attacks of September 2001. However, all commercial air travel—domestic, transborder and other international—experienced the impact of September 2001. Of these, transborder flights were the hardest hit. Although trends can vary significantly from one major airport to another, aircraft movement had still not returned to pre-1999 levels by mid-2002.