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Why Canadian Airlines Are Adding Latin America Capacity as U.S. Demand Softens

Canadian airlines are adding Latin America and Caribbean capacity as some U.S.-bound schedules contract. The shifts vary by airline and season, and scheduled seats do not prove a direct transfer of travelers.
From TheFinanceBase Team4 min to read
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Canadian airlines are scheduling more seats and routes to Latin America and the Caribbean while trimming some U.S.-bound capacity. The shift reflects both leisure-market opportunities and network strategy, but the figures do not show that every added Latin America seat replaces a U.S. seat—or that travelers are switching destinations in equal numbers.

What the schedule figures show

OAG schedule data reported by Aviation Week put two-way Canada–Latin America and Caribbean capacity at an estimated 2.35 million seats in January 2026, up 5.8% from January 2025. A separate OAG estimate for the first quarter of 2026 showed Canadian airlines’ U.S.-bound capacity down nearly 10%, or about 450,000 seats, year over year.

These numbers describe scheduled seats, not passengers carried. They also cover different periods and market definitions: a January regional snapshot is not directly comparable with a first-quarter estimate or an individual airline’s seasonal plan. The parallel changes establish a broad scheduling pattern, not a measured one-for-one transfer of capacity or proof of why each traveler chose a destination.

How the airlines’ plans differ

WestJet: broader winter leisure network

WestJet announced on August 17, 2026, that its winter 2026/27 Latin America and Caribbean schedule would have 12% more capacity year over year. The company said the schedule would reach up to 1,252 weekly flights on 88 nonstop routes from Canada. Its announced additions and increases include more Saskatoon service to Puerto Vallarta and Cancún, growth from Edmonton to Los Cabos and Montego Bay, a new Calgary–Mérida route, Winnipeg service to Belize City and Punta Cana, and Regina–Los Cabos nonstop flights.

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WestJet also announced Calgary–São Paulo service, which it described as the first direct service between Western Canada and South America. Its LATAM partnership is intended to provide onward access to more than 60 South American destinations on one booking. These are announced plans; check WestJet’s release for the stated schedule and confirm current operating details before booking. WestJet executive John Weatherill described it as the airline’s “most comprehensive Latin America and Caribbean schedule yet”; that is the company’s characterization, not an independent measure of demand.

Air Canada: Mexico growth and connecting traffic

Air Canada planned an 18% year-over-year increase in Mexico seat capacity for summer 2026, according to Aviation Week. The plan included three-times-weekly, year-round Montreal–Guadalajara service and more frequencies on Montreal–Cancún, Toronto–Monterrey, Vancouver–Mexico City, and Vancouver–Puerto Vallarta. The same report described winter 2026/27 plans for Toronto–Quito, earlier returns of Lima and Rio de Janeiro service, and increased Montreal service to Santiago and Bogotá.

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The airline’s stated rationale extends beyond vacation travel. Air Canada executive Mark Galardo has described Latin America as a market opportunity and said Canadian hubs can connect Europe–Latin America traffic. Aviation Week reported that Air Canada’s sixth-freedom revenue—revenue from carrying passengers between two foreign countries via its home country—increased 10% in 2025 to a record. That figure points to the potential value of connecting traffic, but it does not establish how much of the airline’s Latin America capacity is driven by connections rather than local Canadian demand.

Porter and the market snapshot

Porter has launched service to sun destinations including Cancún, Puerto Vallarta, Nassau, Grand Cayman, and Liberia, according to Aviation Week’s January 2026 report. In the same report’s OAG schedule snapshot, Latin America and Caribbean capacity was up 81% year over year for WestJet and 22% for Air Canada, while Canada–U.S. transborder capacity was down 9.7%. Those are January schedule comparisons, not annual passenger-traffic results. Aviation Week attributed part of WestJet’s increase to integrating Sunwing into its network and adding routes.

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Why airlines may value Latin America beyond substitution

Leisure destinations offer airlines another market for seasonal flying, while connecting traffic can make a route useful even when passengers are not starting or ending their trip in Canada. Air Canada’s hub strategy is one example: a flight can feed passengers traveling between Europe and Latin America as well as serve Canadian travelers. WestJet’s announced South American service and partnership illustrate a different network mechanism, combining a nonstop route with partner connections beyond the destination.

Air Canada also reported weaker U.S. transborder results in 2025: revenue fell 10.4%, capacity fell 9.6%, and traffic fell 12%, as summarized by Aviation Week. Those operating indicators are not interchangeable: capacity is seats offered, traffic reflects passenger carriage, and revenue measures money earned. They provide context for schedule adjustments but do not demonstrate that U.S. softness alone caused the Latin America expansion. The available figures do not isolate the effects of fares, exchange rates, seasonality, aircraft availability, fuel costs, or consumer sentiment across the carriers.

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How to read the percentages

  • January 2026 market capacity: Canada–Latin America and Caribbean two-way scheduled seats were estimated at 2.35 million, 5.8% above January 2025, based on OAG data reported by Aviation Week.
  • Q1 2026 U.S.-bound capacity: Canadian airline capacity was estimated to be nearly 10% lower year over year, about 450,000 seats fewer, according to OAG as reported by Aviation Week. The same report put capacity to Costa Rica up 15% and to Mexico up 5% for the quarter.
  • Summer 2026 Air Canada plan: Mexico seat capacity was planned to rise 18% year over year; this is a carrier-specific seasonal schedule measure, not realized passenger growth.
  • Winter 2026/27 WestJet plan: Latin America and Caribbean capacity was announced to rise 12% year over year; this is a future seasonal plan, not an observed result.

The percentages should not be ranked as if they measured the same thing. They differ by period, geography, carrier coverage, and whether they describe a market estimate or a company’s announced plan. Schedule growth also should not be read as evidence that capacity will remain in place beyond the stated season.

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