Calgary-based WestJet says demand for travel to the United States has been “soft” over the last few weeks since a possible trade war started brewing between Canada and its biggest trading partner.
“What we have seen though, since the tariff announcements, is that our sales from Canada into the U.S. have actually dropped very significantly,” said Alexis von Hoensbroech, WestJet’s chief executive officer.
The decrease in interest to fly south has dropped by about 25 per cent, von Hoensbroech said, adding the exchange rate likely has something do with the falling demand as well.
“We are watching and we don’t know how sustainable this is.”
The WestJet boss made the comments on Thursday as his company announced a multibillion dollar agreement with Lufthansa Technik to build an aircraft repair and testing facility in Calgary.
The deal for the maintenance facility, which is expected to be completed in 2027, has been in the works for nearly two years, von Hoensbroech added, but it does help provide reliability and certainty for the airline -- something needed now in uncertain economic times.
“I’m personally very disappointed by the way things are going. I think that a trade war is the very last thing this country, this continent, this world needs,” he said. “But we will always adjust to what’s happening and take it from there.”
The Calgary Airport Authority is overseeing the planning and development of the new repair facility. The authority’s president and CEO said the facility will cost about $120 million dollars and is the first of four projects to be announced, which are set to total $300 million.
The goal is to develop Calgary into even more of an aviation hub to allow aircraft to be repaired and maintained in Canada.
“It sort of brings home that message just even more so that we need to control our own destiny -- and the current situation shows that that’s even more important than ever,” said Chris Dinsdale.
“We’re always going to have great trading partners in the US,” he added. “But when we can do what’s best for Canada, for Canadians, we should always step through that door.”
Although WestJet is the primary partner, the facility will be open to all airlines. Construction is set to begin in the spring.
