Shares in Air Canada closed down 12.3%, while Air Transat fell 8% and WestJet down 4% due to heavy trading.
The sell-off was prompted by Air Canada Calin Rovinescu's comments about the impact of the falling dollar on the carrier. The decrease has placed significant pressure on airlines because fuel and airplane costs are paid in US dollars, although some of the fuel is hedged to protect against fluctuations. Fuel prices, one of the largest costs for an airline, are up 8.9% over the last three months in US dollars, but up 13.2% in Canadian currency.
The airlines are acting to stem losses by raising currency surcharges on tickets although there have yet to be fare increases.