Airlines, which have already been impacted by Canada’s issuance of fewer student visas, are bracing for a tough winter following a strain in ties between India and the North American country.
Over 2.2 million passengers flew between the two countries in CY 2023. Air Canada and Air India are the largest carriers in the market and accounted for 45 per cent of traffic last year.
Fresh capacity is being added to the market in the winter schedule, intensifying competition.
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Air India is adding three extra flights between Delhi and Toronto from November 1, making it a double-daily service. In June, Air Canada announced the reintroduction of its winter seasonal flight to Mumbai and the launch of a one-stop flight between Calgary and Delhi via London.
“ Yields on India Canada routes have dropped in July -September quarter,” a senior airline executive remarked. Typically these months see a lot of student traffic from India but with Canada tightening visa issuance, demand has been low. Moreover, certain West Asian airlines incentivise travel agents to sell lower fares, adding to pricing pressure.
“It has been a difficult year,” added another executive. Traffic on India-Canada routes primarily comprises students, migrants, businessmen and visiting family and relatives segment.
Canada is also the fifth largest source market for tourism in India, accounting for 4 per cent of all arrivals in CY 2023. However, that largely consists of Canadian citizens of Indian origin visiting friends and families in India.
While neither country has announced suspension of visa issuance, the withdrawal of diplomats is expected to slow down the process.
India withdrew six diplomats, including the high commissioner, and expelled six Canadian diplomats in return amid escalating tensions over Canada’s handling of Sikh extremism in the country.
In a statement on Monday, India’s Ministry of External Affairs (MEA) rejected the Canadian government’s assertions that Indian diplomats were involved in criminal acts.
“The Government of India strongly rejects these preposterous imputations and ascribes them to the political agenda of the Trudeau Government that is centered around vote bank politics,” the MEA said.