Canadian air prices on way down

Domestic air prices in Canada could drop 5-6% this year, according to a study by American Express Consulting. The company attributes that to greater availability of low fare options and increased competition from low cost carriers. Air Canada reacted to the pressure by introducing a more straightforward pricing structure with lower fares that seems to be working, according to Frank Schnur, vp of American Express Consulting. Corporations are expected to be major benefactors of the drop, Mr Schnur added, in part because domestic airfares make up 40% of air travel expenses for Canadian companies. At Amex, corporate bookings have increased anywhere from 10-25% in each of the last three months, according to Mr Schnur. He says: “That is strong evidence that business travel is coming back.“