Etihad Airways and Air Canada have signed a memorandum of understanding for codeshare services.

The carriers intend to begin codesharing in the third quarter.

Etihad and Air Canada will enhance an existing interline agreement to include through-checked bags, lounge access and frequent flyer benefits.

Etihad plans to put its airline code on Air Canada's flights between Toronto and certain North American cities, while Air Canada will put its code on Etihad flights from Abu Dhabi to Toronto and London Heathrow airport.

The carriers also intend to strengthen their cargo services to their Abu Dhabi and Toronto hubs.

The move comes within days of the United Arab Emirates (UAE) reinstating its visa waiver scheme for Canadians, ending a three-year long suspension.

Abu Dhabi had revoked the waiver in November 2010 whilst lobbying Montreal to ease flight restrictions on Etihad and fellow Gulf carrier Emirates. Following the suspension, Canadian citizens faced visa charges of up to $1,000 when travelling to the UAE.

The governmental dispute also coincided with the UAE’s decision to close Camp Mirage in Dubai, a staging post for Canadian military operations in Afghanistan.

“This is without doubt a significant development in the relationship between Etihad Airways and Air Canada and very much supports the aim to simplify travel between the United Arab Emirates and Canada,” says Etihad chief executive James Hogan.

Air Canada chief executive Calin Rovinescu adds: “We are pleased to establish a mutually beneficial commercial co-operation that will provide our customers with more travel options and frequent flyer benefits.”

Etihad’s earlier lobbying efforts had centred on a bilateral agreement signed in 1999 which restricted UAE carriers to six weekly flights to Canada. That allocation is currently split evenly between Etihad and Emirates. Both airlines have called for daily access.

It is not clear whether the MoU includes any provisions for possible expansion of landing rights at a later date.

Source: Air Transport Intelligence news

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