Expanded Middle East Air Transport Agreements Could Challenge Canadian Carriers

Late last year, following a visit by Prime Minister Mark Carney to the Middle East, Transport Minister Steven MacKinnon announced the expansion of air transport agreements with Saudi Arabia and the United Arab Emirates.

The expansion will allow as many as 14 passenger flights per week from Saudi Arabia — up from four – and as many as 35 passenger flights a week from the U.A.E., up from a maximum of 21.. The reciprocal deal will allow Canadian carriers to send the same amount of flights to the Middle East. 

Canada had restricted the number of flights coming from Saudi Arabia and the U.A.E. in past years after diplomatic spats over human rights issues and a lack of reciprocal benefits for Canada’ airlines. But Carney said the region is of growing importance for Canadian trade.

“The global economy is being rewired. Canada isn’t retreating,” Carney said after his visit to the U.A.E., which resulted in a $70-billion commitment from the country to invest in Canada. 

A CBC News story suggests that the expanded air agreements will put pressure on Canadian airlines, as they try to compete with the services offered by Middle East carriers.

Aviation expert John Gradek said airlines from the region are considered the “envy of the world” because of the services they offer, which will force Canadian airlines to do more if they want to go head-to-head.

“Canadian carriers are going to have to up the ante and up their game to be able to compete,” said Gradek, who is a lecturer of aviation management at McGill University.

“It’ll push Air Canada, it’ll push WestJet and may push our friends over at Air Transat to kind of look at the service level they’re offering on board the airplane, and the amenities and actual configuration of the airplanes.”

Gradek also said Canadian airlines “will be hard pressed to match” the experience that airlines from the Middle East are offering at competitive economy prices, because they make big bucks on premium seats which offsets losses from economy.

“They’ll fill up the airplane with low-priced tickets for the economy section,” he said. “But they are looking at the premium market.”

In a statement to CBC, Air Canada says it’s already competitive “with the best in the world.” 

“Yes, Middle East airlines carry significant connecting traffic to regions such as the Indian Subcontinent, but our agreement with Emirates enables us to flow traffic beyond Dubai on our Toronto-Dubai flight,” wrote AC spokesperson Peter Fitzpatrick. 

In mid-November, Air Canada and Emirates expanded a previous 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 rewards through a shared loyalty program.