Canadian airlines could be forced to ‘up their game’ as Ottawa allows more competition from Middle East

Airlines in Canada could soon be under pressure from customers to improve their services as the federal government opens its skies to more competition from the Middle East. 

Ottawa is loosening restrictions on the number of flights coming from Saudi Arabia and the United Arab Emirates after past diplomatic spats had limited flights.

Aviation expert John Gradek said airlines from the Middle East 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 with these foreign carriers.

“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.”

Canadian MPs and senators through parliamentary committees have studied a series of issues hitting Canada’s airline industry in recent years including a lack of competition, high fares, accessibility complaints and passengers’ rights.

Airlines like Emirates are famous online for their first-class seats. Videos created by YouTubers and influencers have garnered millions of views showing off Emirates’ caviar meals, fancy sleeping pods and showers onboard.

In 2010, the Canadian government refused to allow more flights from the U.A.E. to protect Canada’s industry. Air Canada at the time said airlines like Emirates pick up Canadians and take them to third countries with a stopover in Dubai, and there isn’t much reciprocal benefit to Canadian carriers.

The U.A.E. retaliated by banishing Canada from a once-secret logistics base Canadian troops were using for operations in Afghanistan. 

Saudi Arabia suspended flights to Canada between 2018 and 2023 after a diplomatic dispute over Canada’s condemnation of its human rights record. Global Affairs Canada publicly called out the country for arresting activists and demanded their release. 

WATCH | Canadian Ambassador says tweet about Saudi activists wasn’t wise or helpful:

Prime Minister Mark Carney is now trying to improve relations with countries in the Middle East and other parts of the world as part of his plan to diversify trade away from the U.S. during President Donald Trump’s trade war. 

“The global economy is being rewired. Canada isn’t retreating,” Carney said after his visit to the U.A.E. on Nov. 23.

Carney visited Abu Dhabi in November and landed a $70-billion commitment from the country to invest in Canada. 

More than a week later, Transport Minister Steven MacKinnon announced the government is expanding air transport agreements to allow as many as 14 passenger flights per week from Saudi Arabia — up from four. 

The latest deal also includes as many as 35 passenger flights a week from the U.A.E., up from a maximum of 21. Plus unlimited cargo flights from both countries. The reciprocal deal will allow Canadian carriers to send the same amount of flights to the Middle East. 

“This is all part of our ambition to continue to grow export markets, build and strengthen business ties and have generally speaking more openness and more ability to deal with the rest of the world,” Mackinnon said. 

WATCH | Carney signs U.A.E. investment pact, launches trade talks:

Countries including in the Middle East are trying to reach the “gold standard” with Canada, Gradek said. These foreign carriers, he said, want to reach an open skies agreement like Canada has with the United States for unlimited market access. 

Gradek says he believes the government’s new deal is better for the airlines from the Middle East because it allows foreign airlines to transport more Canadian travellers to hubs in places like Dubai and onto connecting flights all over the world including the Indian subcontinent. 

In comparison, Canadian carriers can pick up more travellers from the Middle East to hubs in Canada and onto connecting flights to the U.S. which Gradek said is a smaller market. 

“I think the foreign airlines will get a bigger piece of the pie,” he said. “I think you’ll see much more presence by the Middle East carriers.”

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 News, 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 Peter Fitzpatrick, a spokesperson for Air Canada.

In mid-November, Air Canada and Emirates announced they’d expand their 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. 

WestJet and Air Transat did not respond to a CBC News request for comment about the impact of the government’s move to open up Canadian skies.

The government also announced in mid-December it’s allowing more flights between Canada and Albania in an effort to “improve Canada’s air links to the rest of the world.”