Canadian airlines may be forced to ‘up their game’ as Ottawa allows more competition from Middle East
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Canadian airlines may soon be under pressure from customers to improve their services as the federal government opens its skies to more competition from the Middle East.
Ottawa is easing restrictions on the number of flights from Saudi Arabia and the United Arab Emirates after previous diplomatic posts had limited flights.
Aviation expert John Gradek said airlines from the Middle East are considered “the envy of the world” because of the services they provide, which will force Canadian airlines to do more if they want to compete directly with these foreign companies.
“Canadian carriers are going to have to step up to be competitive,” said Gradek, a professor of aviation management at McGill University.
“It’s going to push Air Canada, it’s going to push WestJet and it may push our friends at Air Transat to look at the level of service they provide on the plane, and the facilities and the actual configuration of the planes.”
Canadian MPs and senators through parliamentary committees have studied a range of issues affecting the Canadian airline industry in recent years including lack of competition, high fares, accessibility complaints and passenger rights.
Airlines like Emirates are famous online for their first class seats. Videos created by YouTube users and influencers have garnered millions of views showing Emirates’ caviar meals, sleeping pods and showers inside.
In 2010, the Canadian government refused to allow more flights from the UAE to protect Canadian industry. Air Canada at the time said airlines such as Emirates take Canadians and take them to third countries where you stop in Dubai, and there is not much associated profit for the Canadian carriers.
The UAE retaliated by kicking Canada out of a previously secret transit facility used by Canadian troops to operate in Afghanistan.
Saudi Arabia has suspended flights to Canada between 2018 and 2023 after an official dispute over Canada’s human rights record. Global Affairs Canada announced the country’s arrest of the activists and demanded their release.
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Prime Minister Mark Carney is now trying to improve relations with countries in the Middle East and other parts of the world as part of his plan to diversify trade away from the US during President Donald Trump’s trade war.
“The world economy is being changed. Canada is not backing down,” Carney said after his visit to the UAE on November 23.
Carney visited Abu Dhabi in November and made the country’s $70 billion commitment to invest in Canada.
More than a week later, Transport Minister Steven MacKinnon announced that the government was expanding air transport agreements to allow 14 passenger flights a week from Saudi Arabia – up from four.
The latest deal also includes up to 35 passenger flights per week from the UAE, up from 21. Plus unlimited cargo flights from both countries. The mutual agreement would allow Canadian carriers to send the same number of flights to the Middle East.
“This is all part of our desire to continue to grow foreign markets, build and strengthen business relationships and talk about more openness and more ability to deal with the rest of the world,” said Mackinnon.
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Countries including the Middle East are trying to reach the “gold standard” with Canada, Gradek said. These foreign carriers, he said, want access to an open skies agreement like Canada has with the United States to gain unlimited market access.
Gradek says he believes the new government deal is better for airlines from the Middle East because it allows foreign airlines to transport more Canadian travelers to destinations like Dubai and on international flights including the Indian subcontinent.
In comparison, Canadian carriers can pick up more travelers from the Middle East to Canadian destinations and onto connecting flights to the US, which Gradek says is a smaller market.
“I think foreign airlines will get a bigger piece of the pie,” he said. “I think you’re going to see a lot more presence of Middle Eastern carriers.”
Gradek also said that Canadian airlines will be “hard pressed to match” the experience offered by airlines from the Middle East at competitive economy rates, because they make more money on premium seats that reduce economy losses.
“They will fill the plane with cheap economy class tickets,” he said. “But they’re looking at the premium market.”
In a statement to CBC News, Air Canada says it already competes with “the best in the world.”
“Yes, Middle Eastern airlines carry significant traffic connecting regions such as the Indian Subcontinent, but our agreement with Emirates enables us to flow traffic beyond Dubai on our Toronto-Dubai flight,” wrote Peter Fitzpatrick, Air Canada spokesman.
In mid-November, Air Canada and Emirates announced that they would extend their three-year strategic partnership until 2032. Both airlines agreed to market and sell tickets for the same flights and allow their customers to earn and redeem awards through a shared loyalty program.
WestJet and Air Transat did not respond to CBC News’ request for comment on the impact of the government’s move to open Canada’s skies.
The government also announced in mid-December that it would allow more flights between Canada and Albania in an effort to “improve Canada’s air links around the world.”
