Air Canada retains hard line against UAE carriers

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Air Canada continues to press its case for prohibiting expansion of service from carriers based in the United Arab Emirates, contending those carrier aim to flood the market and siphon off profitable flying.

Using a platform at the pre-ICAO Assembly conference at Montreal's McGill University, Air Canada chief Calin Rovinescu explained whenever he discusses the carrier's views on liberalization, "the issue of the UAE carriers and their powerful lobbying and media campaign aimed at various Canadian government officials, local communities and airports arises".

But Rovinescu believes it is an issue faced by many countries globally "where the UAE airlines are aggressively pressing to expand in order to support their overbuilt airports and other infrastructure back home".

Air Canada's chief says he endorses liberalization; however, the carrier "is not supportive of turning over our hard-earned network and flow traffic to state subsidised carriers of countries where there is no such reciprocal demand".

Rovinescu argues that few Canadians actually travel to Dubai as a destination and fewer still residents of Dubai travel to Canada.

"It is well known in our industry that these state-owned and subsidised carriers are pushing hard to capture and divert as much global flow as possible to Dubai and elsewhere in the region," he argues.

Forging an unbalanced trade agreement with the UAE that would essentially allow the "dumping" of seats in the Canadian market would create a severe impact, restricting the growth of direct services from Canada to many international points for thinner markets like Calgary, Montreal and Ottawa, Rovinescu says.

Obviously, Middle Eastern carriers dispute Roveinscu's assessment of demand from Canada to the region. Emirates has repeatedly argued that its Airbus A380-operated Dubai-Toronto flights are running at load factors beyond 90%, while Qatar has commented that Canada is now the carrier's single largest offline market.

Reiterating Air Canada's importance to the Canadian economy, Rovinescu cites a 2009 study showing the air transport sector in 2009 directly generated $6.5 billion of Canada's GDP.

"The total GDP impact of the industry is estimated at $12 billion," he says. "Once the aggregate economic impact--direct, secondary and catalytic - effects of our industry are taken into account, the impact exceeds $35 billion in GDP".

Pointing to the strength of Air Canada's market power in Canada Rovinescu states: "Air Canada's own contribution is estimated at slightly more than 50% of the total contribution of the Canadian industry, including that of foreign airlines operating into Canada."