AIR SERVICE

Industry Updates 

Global airline profitability is facing increasing pressure in 2026 as higher fuel costs, driven largely by ongoing conflict in the Middle East, are expected to significantly reduce industry earnings. According to the International Air Transport Association (IATA), rising jet fuel prices could add approximately $100 billion in operating costs worldwide, with industry profits projected to decline substantially compared to 2025. 

Despite these challenges, travel demand has remained resilient, allowing airlines to offset some cost increases through higher fares and continued investment in premium products and airport lounge offerings. Airlines continue to evaluate growth opportunities but will remain cautious until fuel prices and geopolitical conditions stabilize.

PSP Service Updates

During our recent meetings with airline network planners, most indicate that demand remains strong heading into the fall travel season. Several carriers are shifting capacity toward domestic markets amid continued geopolitical uncertainty overseas.

Canadian carriers reported that the decline in Canadians traveling to the U.S. may have reached its low point, as they are beginning to see early signs of a booking recovery. In addition, several airlines expressed strong interest in PSP’s ongoing efforts to build a Federal Inspection Station (FIS), which would allow additional international flights from Mexico, secondary Canadian cities, and overseas flights in the longer-term. 

Through May 2026, PSP welcomed 1.82 million passengers, a 3.5% decline compared to the same period in 2025. The primary driver was a 17.9% decrease in Canadian passenger traffic, which also contributed to Porter Airlines' decision not to return this season. Additionally, Allegiant will discontinue service to PSP following the closure of its Bellingham base in advance of its merger with Sun Country Airlines. Bellingham was heavily dependent on Canadian travelers crossing the border to take advantage of cheaper airfares. Combined, the Porter Toronto and Allegiant Bellingham routes represented approximately 2% of PSP’s total air service.

Below is the latest data for PSP. Click HERE or the image below to view the multiple-page PDF report.

For more information on Air Service development, click here.

If you have any questions about air service, please contact:
Gary Orfield, Director of Tourism Development​
gary@visitgreaterps.com | 760.969.1335