There are mixed signals in the Canadian marketplace right now. Although the federal government forecasts a 3.1% growth in GDP, consumers don’t share the same optimism when it comes to spending.
Over the first half of 2010, TNS Canada’s Consumer Confidence Index reveals that confidence in the Canadian economy is shaky and uncertain. As a result, consumers’ willingness to make major purchases as well as to spend on discretionary items (including travel) may continue to be withheld until they feel more confident. The average value of the Canadian dollar has experienced a steady climb reaching par with the U.S. dollar.
A common perception of domestic air travel is that it is costly to travel long-haul from one Canadian destination to another. According to a national survey conducted by Leger Marketing (June 2010), it was found that two-thirds of respondents felt that flying domestically often costs more than flying abroad. To make matters worse, domestic airfares are expected to climb this year to compensate for the deep discounts Air Canada and WestJet offered during the recession.