A potential shift in the Canadian airline industry is on the horizon as the federal government relaxes restrictions on flights from Saudi Arabia and the United Arab Emirates, potentially intensifying competition from the Middle East. This move is anticipated to compel Canadian airlines to enhance their services to compete with carriers from the Middle East, known for their exceptional offerings.
Aviation expert John Gradek highlighted the need for Canadian carriers to elevate their services to match the standards set by airlines from the Middle East. This adjustment may prompt Air Canada, WestJet, and Air Transat to reevaluate their in-flight services, amenities, and aircraft configurations to stay competitive.
Recent parliamentary committee discussions have addressed various challenges faced by Canada’s airline industry, such as limited competition, high fares, accessibility concerns, and passenger rights issues. Notably, airlines like Emirates have gained popularity for their luxurious first-class amenities, attracting attention online through influencers showcasing lavish offerings like caviar meals and in-flight showers.
In a bid to diversify trade beyond the U.S., Prime Minister Mark Carney has been fostering stronger relations with Middle Eastern countries. Following his visit to the United Arab Emirates, Carney secured a substantial $70 billion investment commitment from the country to bolster economic ties with Canada.
Transport Minister Steven MacKinnon’s announcement of expanded air transport agreements signifies a significant development, allowing for an increase in weekly passenger flights from Saudi Arabia and the United Arab Emirates. This initiative aims to bolster export markets, strengthen business relationships, and enhance Canada’s connectivity with global partners.
Gradek emphasized that countries in the Middle East aspire to achieve a comprehensive air transport agreement akin to Canada’s arrangement with the United States, facilitating unrestricted market access. He predicts that the new agreement will benefit airlines from the Middle East, enabling them to transport more Canadian travelers to key hubs like Dubai for seamless connections worldwide.
Canadian carriers, on the other hand, are expected to focus on attracting travelers from the Middle East to Canadian hubs for onward connections, particularly to the U.S. market. Gradek suggested that foreign airlines may gain a larger market share due to their competitive offerings, especially in the premium segment.
In response to these developments, Air Canada emphasized its competitiveness on a global scale and highlighted its existing partnership with Emirates, which allows for seamless travel beyond Dubai. Additionally, Air Canada and Emirates recently extended their strategic partnership until 2032 to enhance customer benefits and loyalty rewards.
While Air Canada provided a positive outlook on its competitive position, WestJet and Air Transat did not comment on the implications of the government’s decision to liberalize air transit agreements. Furthermore, the government’s initiative to expand flight connections with Albania underscores its commitment to enhancing Canada’s air connectivity with global destinations.