The Saga Continues, Air Services Agreement between Qatar and Canada

Canada has signed an Air Services Agreement with Qatar (here to read more) weeks after both the Canadian Government and Air Canada opposed it. It seems Mr. Al Baker's alluding to the possibilities and impossibilities of investments and trade had helped people in Ottawa make up their mind.

"This agreement responds to the needs of the Canada-Qatar travel market and is a first but important step in developing Canada-Qatar air relations," says John Babcock, a spokesman for Canadian Transport Minister Chuck Strahl.

Sounds great and should equally apply to the UAE which is almost 4 times a larger market with a much larger Canadian Community however Air Canada is still self delusional and dragging the government with it

Recently Air Canada chief executive Calin Rovinescu said 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".

So in his eyes all of a sudden Qatar Airways is not a subsidised carrier and there is more reciprocal demand with Qatar than the UAE.

I respect the need to protect a "hard-earned network" including its feed to and from Star Alliance partners. It appears that Air Canada has an objection to a Dubai Global Hub and it fears that if Emirates, not Etihad per se, dumps capacity into Vancouver for example it will deter all other airlines from competing out of Vancouver and generating 275,000 new seats per year will decimate Vancouver as a hub and make it into a stub in Emirate's Dubai hub.

Air Canada has indicated that they oppose any increases in frequency or addition of flights to the UAE and Qatar, in order to protect their traffic to Frankfurt. Lufthansa (Star Alliance) will operate from there onwards to MENA and the GCC. Basically it boils down to a capacity issue coupled with a level of service. Air Canada does not have the lift to operate additional flights or to operate directly to the UAE and Lufthansa probably has different plans.

Canada is a popular immigration destination for professionals from MENA, GCC and the Indian Sub Continent. It is also a popular destination for higher education from the region. Hence, this is a growing market for "Visiting Friends and Relatives"

Air Canada needs to leverage its Star Alliance connections to tap more into this market or start operating its own flights to the region.

The unfortunate escalation between the UAE and Canada over this issue so far has been low key, even though to Canadian residents in the UAE it has an impact on the mobility of their non resident family members.

Hopefully, the issue will be resolved to the mutual benefit of all concerned.