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Economic Viewpoint

Turbulence Ahead? The Potential Economic Impacts of a Prolonged Pilot Strike

September 12, 2024
Randall Bartlett, Senior Director of Canadian Economics • LJ Valencia, Economic Analyst

Air Canada is Canada’s leading air cargo carrier and largest airline. Because of its outsized role in the Canadian airline market, a prolonged pilot strike could negatively impact economic activity.

The last pilot strike was in 1998 and lasted for two weeks. In August of this year, Air Canada pilots voted overwhelmingly to approve a strike mandate starting as early as September 18. Using our near-term forecasting framework and internal passenger flight forecasts, we estimate that a two-week pilot strike could result in a loss to real GDP of around $1.4 billion (-0.06% m/m) in September. This would mean daily losses of roughly $98 million. In addition, the number of passengers could decline by 2.1 million (-29% m/m). A longer strike could have an even greater negative impact on the economy.

While economic activity in air transportation would decline in September, we expect that the air transportation industry would recover by around $1.5 billion in October in the event of a two-week pilot strike similar to that in 1998.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.