Why is Air Canada increasing capacity to Mexico?

Leisure and VFR demand to beach markets is strong, while some U.S. transborder routes are softer. Mexico offers scale, reliable bookings, and solid ancillary revenue. Concentrating flights on proven corridors like Toronto–Cancun can lift aircraft use, protect yields, and support margins when scheduled with care for seasonal peaks and shoulder periods.

Will fares on Toronto Cancun flights go up or down?

Added capacity can pressure fares, but strong demand and packages can keep prices firm in peak weeks. Expect deals in shoulders and early booking incentives. School holidays and bank holiday windows often price higher. Monitoring advance purchase curves is key to gauging where fares for Toronto Cancun flights will settle.

What should investors watch to assess this strategy?

Focus on Latin America PRASM, load factors, and ancillary revenue per passenger. Track monthly traffic and on-time performance. Look for signs of fare stability despite capacity growth. Management commentary on tour operator commitments and forward bookings will indicate durability. Any shift of aircraft back to U.S. routes would signal a change in demand balance.

Does this shift affect risks for the airlines?

Yes. Concentration in sun markets raises exposure to weather and seasonal swings. However, larger scale on proven routes can improve reliability and unit costs. The key risk checks are cancellation rates, hurricane season disruption, and competitive pricing pressure. Fuel costs and FX moves also influence margins and reported performance.

Global Market Insights

February 22: Air Canada Lifts Mexico Capacity as Cancun Demand Soars

ByHuzaifa Zahoor February 22, 2026February 22, 2026

Demand for the cancun flight is surging, and Air Canada is moving fast. The airline plans an 18% seat increase to Mexico for summer 2026, while Canada–Mexico capacity is set to jump 46%. Toronto–Cancun is now the busiest international corridor into Mexico. For UK investors, this pivot signals stronger leisure and VFR demand, and a shift away from softer U.S. transborder traffic. We explain the drivers, revenue impact, and what to watch next.