Roadblock in Open Skies

IN the wake of a recovery, we can expect the better-heeled airlines to be once again setting sight on expanding their services and looking at new destinations. Emirates Airlines, flag-carrier of the United Arab Emirates, has expressed interest to extend its services in Canada beyond Toronto, to Vancouver and Calgary. Air Canada has objected vehemently.

It would appear that after a long dry spell of cutting back services to stay afloat during the recent global economic downturn, the open skies concept has been relegated to the backburner. The effort to resume its past subscription now faces new roadblocks.

Air Canada’s chief, Calin Rovinescu, tells the authorities that allowing Emirates to expand in Canada will cost the country jobs and money. What’s new? Qantas of Australia had used that same argument when it objected to Singapore Airlines (SIA) flying beyond Sydney and Melbourne to the west coast of the United States. Other national airlines afraid of the competition that foreign carriers would bring to home ground continue to spin the same tiresome thread.

Emirates, of course, argues the contrary. A study it commissioned shows that Canada will gain annually some C$480 million (US$478 million) and benefit from the creation of 2,800 new jobs across the country. A similar exercise was used by SIA in Australia but to no avail.

Open skies opponents usually see an unfair trade-off for what a competitor like SIA and Emirates – modeled after the success of SIA – that thrives on fifth freedom and transfer loads has to offer. But, lest we forget, the ultimate loser is the consumer when the skies are closed. If, in the case of a standoff between Air Canada and Emirates, that is not Ottawa’s top priority, consider how this would stunt the growth of airports like Vancouver and Calgary. Or is it a strategy to concentrate on growing Toronto – as the national hub – at the expense of these others?

For Air Canada, it may be less enervating to limit the competition to a single hub and then provide the feed from there to the rest of the country. But Canada is a big country, and limiting accessibility can be an economic disadvantage.

On the other hand, the local authorities for Vancouver International Airport (YVR), voted the best in North America by Skytrax, are keen to welcome more and new users. Sure, there is good news that Air Canada has expanded its code-share partnership with Korea’s Asiana Airlines – both airlines are Star Alliance partners – and this, in the name of an Open Skies agreement signed between Canada and Korea in 2009. Air Canada operates daily service between Vancouver and Seoul with same plane service from Toronto.

But in recent times, YVR also lost the clientele of SIA, experienced reduced flights by Cathay Pacific Airways and almost lost the direct service between Vancouver and Tokyo by Japan Airlines which, according to an insider source long before it petitioned for bankruptcy protection, was considering redirecting the connection through other American ports outside Canada. Such moves must hurt YVR’s image as an attractive destination.

The airline industry has come a long way since the early days of calling for the skies to be liberalized. It would be a pity and a major setback if we turn back the clock.

This article, retitled as  “Air Canada blocks Emirates’ expansion”, was also published on www.airwaysaviationnews.com.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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