- Randall Bartlett, Senior Director of Canadian Economics • LJ Valencia, Economic Analyst
Turbulence Ahead? The Potential Economic Impacts of a Prolonged Pilot Strike
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.
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