The Impact of the New

US-Canada Aviation Agreement

At Its Third Anniversary

U.S. Department of Transportation

Office of Aviation and International Economics

February 1998
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The Impact of the New

US-Canada Aviation Agreement

At Its Third Anniversary

Background

The U.S.-Canada Aviation Agreement was signed on February 24, 1995. Under the agreement, Canadian airlines gained the right

to serve any city in the United States. U.S. airlines also gained unlimited access to Canadian cities with the exception of Montreal,

Toronto and Vancouver. For these three cities, new U.S. airline services are being phased in over a transition period. The phasein provisions for Montreal and Vancouver expired on the second anniversary of the new aviation agreement (February 24, 1997)

and the restrictions for Toronto will be removed on the third anniversary (February 24, 1998).

Highlights

• The United States-Canada market is the world’s largest bilateral passenger market. Since the “open transborder”

agreement was signed, significant numbers of international travelers have benefited.

• Since the agreement was signed, total US-Canada passenger traffic has increased 37.2 percent (12.1 million to 16.6

million). In the three years prior to the agreement, traffic grew 4.3 percent. On average, the yearly growth rate following the

agreement was 11.1 percent compared to 1.4 percent before the agreement. (Chart 1)

• Based on preliminary data (year ended August 31, 1997 -- latest available -- compared to the year ended August 31, 1996),

total passenger traffic growth in the US-Canada market in all services reached 5.1 percent (15.8 million to 16.6 million) with

a growth rate of 4.0 percent in scheduled services (15.1 million to 15.7 million). Charter passenger traffic increased 26.6

percent (703,000 to 904,000). (Chart 2)

• In 1994, there were 54 nonstop markets with annual traffic of more than 50,000 passengers. In 1997, the number of

markets with that level of traffic increased to 77 markets – an increase of 42.6 percent. (Chart 3)
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• In 1997, 51 transborder markets had annual traffic levels of more than 100,000 passengers. Of these 51 large markets, 17

markets received their first new nonstop scheduled. (Table 1)

• There were 33 markets with annual passenger traffic between 35,000 and 100,000 in 1997. Among these markets, 21 also

gained their first new nonstop scheduled service. Thus, of the top 84 city-pairs, 38 were markets that received their first

new nonstop service as a result of the new agreement.

• Between 1994 and 1997, 17 transborder markets experienced traffic increases of more than 100,000 passengers. (Table 2)
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4.3%

37.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

Chart 1

Comparison of Passenger Traffic Growth

Three Years Before and After the Agreement

Three Years

Prior to the 

Agreement

Three Years

After the

Agreement

(Average Annual

Growth Rate of 1.4%)

(Average Annual

Growth Rate of 11.1%)

(1991-1994)

(1995-1997)
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CY 1994 CY 1995 Y 1996 (August) Y 1997 (August)

12.1

13.3

15.8

16.6

CY 1994 CY 1995 Y 1996 (August) Y 1997 (August)

Chart 2

U.S.-Canada Passenger Traffic

Has Increased 37 Percent

Since the New Agreement

Millions of Passengers
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Chart 3

The Number and Relative Size of U.S.-Canada

Nonstop Markets Have Increased

54

20 19

12

3

77

26

33

15

3

0

10

20

30

40

50

60

70

80

90

Number of

Markets >

50,000

Passengers

50,000 -

99,999

Passengers

100,000 -

249,999

Passengers

250,000 -

499,999

Passengers

500,000 or

More

Passengers 

1994 1997
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In 1997, there were 51 transborder markets with annual traffic levels of more than 100,000. Of these 51, 17 have gained their first

new nonstop scheduled service since the agreement. Between 1994 and 1997, 17 transborder markets experienced traffic

increases of more than 100,000 passengers.

Table 1

Month

Canadian U.S. New Service

City City Began

1 Calgary Minneapolis May-95

2 Montreal Atlanta May-95

3 Montreal Ft. Lauderdale Jun-95

4 Ottawa Chicago May-95

5 Toronto Atlanta Mar-95

6 Toronto Denver Oct-95

7 Toronto Ft. Lauderdale Jun-95

8 Toronto Las Vegas Nov-95

9 Toronto Minneapolis Oct-95

10 Toronto Orlando Jun-95

11 Toronto St. Louis Apr-95

12 Toronto Washington, DC Jun-95

13 Vancouver Dallas/Fort Worth May-95

14 Vancouver Las Vegas Nov-95

15 Vancouver Minneapolis May-95

16 Vancouver Phoenix May-95

17 Vancouver Reno May-95

Table 2

Increase in

Canadian U.S. Passengers

Rank City City Since Agreement

1 Toronto Atlanta 332,875

2 Toronto New York 284,055

3 Vancouver Dallas/Fort Worth 235,827

4 Vancouver Los Angeles 225,739

5 Vancouver San Francisco 193,649

6 Toronto Miami 169,369

7 Vancouver Minneapolis 165,931

8 Toronto Washington, D.C. 164,643

9 Montreal Atlanta 155,735

10 Toronto Minneapolis 146,034

11 Ottawa Chicago 129,301

12 Toronto St. Louis 122,884

13 Vancouver Phoenix 118,076

14 Vancouver Las Vegas 117,962

15 Calgary Minneapolis 113,681

16 Toronto Denver 108,480

17 Toronto Orlando 101,176