Canada's airlines are expected to turn a profit this year after posting losses of $381 million in 2009, according to the Conference Board of Canada.


An Air Canada plane lands at Pearson airport in Toronto. The Conference Board of Canada says Canadian airlines have returned to profitability.

The anticipated pre-tax profit of $192 million this year is based on growing passenger loads. Canadian ticket prices are up just 0.1 per cent.

"Passenger counts are up, and airlines are enjoying a much-improved 2010, but the industry is still several years away from approaching its pre-recession profit levels," said economist Maxim Armstrong.

The profit for Canadian airlines peaked at $530 million in 2007.

A Conference Board report suggests Canadians might be faced with price increases next year.

"Air travellers are willing to fly, but only if the price is right, so airlines have limited ability to increase fares even when costs such as fuel are on the rise," Armstrong said.

Ticket price increases have already hit U.S. airlines as passenger levels rise.

According to the online booking company Orbitz Worldwide, American air carriers hike fares by about 20 per cent in the spring, although there was a slight moderation in July.

"It's still up year over year, in some cases [by] double digits," said Brian Hoyt, Orbitz vice-president of communications. "However, we saw a moderation in pricing to … [U.S.] destinations. So, in North America, we saw about a 10 per cent increase year over year in pricing.

'What we're seeing now is flights at all-time-high capacity, and that's driving the higher ticket prices.' —Brian Hoyt, Orbitz Worldwide

"Internationally, we saw about a 17 per cent increase."

Hoyt says airlines are operating fewer flights but filling them closer to capacity as more business travellers take to the air, and that's contributing to fare increases.

"What we're seeing now is flights at all-time-high capacity, and that's driving the higher ticket prices," he said. "As airlines start to put more planes in the sky, you're going to see the return of the leisure traveller to booking those flights again."

Hoyt expects prices to moderate again as airlines begin to add more flights and destinations.