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Wed 10 Mar 2010 08:29 AM

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Air Canada chief hits out at Emirates growth plans

CEO says expansion plans would 'severely damage' Canada's airports, airlines.

Air Canada chief hits out at Emirates growth plans
DUBAI CARRIER: Emirates plans to expand its three-day-a-week Dubai-Toronto service. (Getty Images)

The chief executive of Air Canada accused Emirates airline on Tuesday of wanting to "flood" Canadian skies with airline seats so it can scoop up travellers and divert them through Dubai.

Such a move by the Dubai government-owned airline would be "severely damaging" to airports and airlines operating in Canada as it would steal away the connecting passengers they depend on to make their routes profitable, Calin Rovinescu, CEO of Canada's biggest airline, said.

"While its argument may be seductive, what Emirates' strategy will do is constrain the growth of Canadian airports by turning them from hubs into stubs at the end of a spoke that leads only to Emirates' hub in Dubai," Rovinescu said in a speech in Vancouver.

Emirates has been lobbying the Canadian government to allow it to expand its three-day-a-week Dubai-Toronto service. It also wants to fly to Calgary and Vancouver.

A study, commissioned by Emirates and released two weeks ago, concluded that Canada could reap economic benefits of C$480 million ($466 million) a year and create 2,800 jobs if the Mideast airline was given more flying slots.

"It is well known in the industry that Emirates is trying to push hard to divert as much global flow traffic via Dubai in order to deploy its massive fleet of wide-body aircraft, including (Airbus) A380s it has purchased or has on order," Rovinescu said.

He said statistics showed that the number of people traveling daily to Dubai from Canada last year was "barely enough to fill a mid-size, 213-seat Boeing 767".

Emirates was not immediately available for comment.

Last month Emirates' senior vice-president of international affairs, Andrew Parker, told Toronto's Globe and Mail newspaper that Air Canada and its Star Alliance partner, Deutsche Lufthansa AG, were unnecessarily worried about losing passengers to Emirates.

He said Emirates' Toronto-Dubai flights have been more than 90 percent full. (Reuters)

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H. dastoor 10 years ago

If u cant beat em, why dont u join them. take on the competetion and stop whining

Original Joe 10 years ago

Why is this guy crying? So Emirates wants daily flights to Toronto, Calgary and Vancouver. You are talking about 1 flight flying in and out of an airport a day.....1 flight? And this guy is afraid of that? How many flights does Emirates fly per day into Heathrow? 5 maybe? Gatwick? 3,4, or 5? Why is the Air Canada CEO scared? Is their airline so bad he believes Emirates will step all over them and steal their customers? If so, improve yourselves and make your airline so good customers will not want to fly on the competition!

Mohad 10 years ago

Right, so an Airline from Dubai which may fly once or twice from 3 Canadian cities is going to put Air Canada out of business? Right! Imagine if that statement was said by Sh Ahmed in Dubai about putting Emirates out of business by opening market for Air Canada. That would have gone worldwide frontpage headlines tagging Arabs as a old age mentals. Air Canada... two words for you... grow up and accept the challenge. Stop whining and cribbing. Anyone who wants to fly Emirates would probably want to goto GCC countries, Sub-Continent, Africa or Asia which Air Canada does not fly regardless. So either behave like a mature company and compete in the market or just watch ice hockey. Between, Air Canada I think its high time you upgrade your website as well. Looks like budget airline. Why not consider codesharing with Emirates by the way?

Dave 10 years ago

Mohad...just as Air Canada is acting close minded in the airline sector, the UAE too has sectors with a similar mentality. Its called the telecom sector, and the existing 2 firms probably wouldnt be able to compete with many worldwide firms in an open market which is why there is a duopoly.

TrueFacts 10 years ago

Air Canada's arguments are valid. Emirates is more interested in making Canada a spoke within a Dubai hub than anything else. Even according to an Emirates consultant, the load factor is a maximum of 65%. This is according to InterVista who were commissioned by Emirates to release a report for them. So according to their own consultant's report there is undercapacity and no requirement for additional flights. See the analysis below from http://airceo.com/2010/02/emirates-fights-for-canada-chapter-2/ The transport industry regulator in Canada, Transport Canada, has done its own research and also found overcapacity. They cannot add flights for carriers unless there is a requirement for it. This is a rule that all carriers have to follow. The UAE seems to think that rules are not applicable to it and instead have mixed economic interests with Canada's (and their own) security interests by saying they may not renew the lease for Camp Mirage in Dubai unless Transport Canada gives Emirates more flight rights. The UAE has to follow rules in the countries they want to operate in and not resort to bullying.

Cindy 10 years ago

I'll tell you all why Air Canada should be scared. They have the worst service on any airline that I have ever flown. It makes me embarrassed to be Canadian. Air Canada has a lot of nerve complaining about other airlines, they stopped their flight from Heathrow to St. John's Newfoundland but will open it again whenever any competition flys that route. Just long enough to take the competition out of business then Air Canada will stop the route again. I am all for Emirates having more flights to Canada, I just wish they would fly to Newfoundland so I wouldn't have to get on Air Canada!

Nalindra 10 years ago

I thought Air Canada shold take a leaf out of Qantas and look what happened to the Tourism in Australia and down under in general has grown leaps and bounds... Grow-up Air Canada! playing ice hokey is not the only thing you should be specialising, there is world out there and healthy competion is good for the countries Economy too

Mounir 10 years ago

TrueFacts: What is wrong with making Canada a spoke within the Dubai hub? Emirates provides a service that cannot be offered by Air Canada, West Jet or any of the Star World Alliance that Air canada is a member of! IF Air Canada was able to compete, it wouldnt be worried! the load factor is not a maximum of 65%; and you forget that planes fly humans as well as cargo: freight shipping has increased between the UAE and Canada and more trips are needed to transport the goods, so why not give them the slots? Transport Canada is a government bureacracy; controlled by the lazy, seperatist Francophones who would rather say that Emirates is flying empty planes to end the matter instead of doing their job and research what is ultimately good for canada. Guess what? More UAE flights to Canada is GREAT for canadians! When did the UAE think that some rules are not applicable to it? The UAE has been gracious enough to allow canadians access to the Al Minhad base for free, should the canadians reciprocate? If Canadians had a government that cared for them, this situation wouldnt exist. (and yes, im a canadian).

John 10 years ago

Never having flown Air Canada I don't know anything about their service but the only reason Emirates is offering bargain rates on most routes and routing passengers through Dubai is so that Dubai can then claim how tourist arrivals has grown even in a recession --- even if most of those are only making a connection to other destinations!

Sambc 10 years ago

I lived in Dubai for a few years (1998-2004) and I live in Vancouver. I have flown many times with both Emirates and Air Canada and here are my 2 cents; 1-The level of in-flight service I witnessed flying with Air Canada is the worst I have ever seen hands down. The staff are union workers whom are overpaid and know that the airlines can't fire them hence they could not care less. Sometimes I thought they try to make the point of showing you that they don't care, horrible. Flying with Emirates, I had a very good service (not excellent though, they slipped up a bit in the last few years but Emirates is miles ahead). 2-Businesses and business culture in Canada is not built on providing good service at competitive prices and aiming at driving their costs down through innovation and discipline coupled with investment into people and R&D. The Canadian way of doing business (I'm talking big corporations like Air Canada) is usually to limit the competition through government interference/back up and by limiting the competition/supply options, they can gouge the prices of goods and services that Canadians have no option but to pay and drive their profits way up without having to worry about being competitive and/or economical. That's why you don't see many Canadian businesses having real presence or success outside North America. To give a relevant example, it would cost me almost the same to fly from Vancouver to Toronto as it would to fly to the UK! Of course, the Canadian government supports big businesses by providing legal cover through the so called "regulated competition" which is just a one of many ways to prevent any real competitors from entering the tightly protected Canadian market and Air Canada is one stellar example of that. Why the government does that? simple, the more profits businesses make, the more taxes they pay and that's what everything boils down to. As for poor ordinary Canadians, the government does not really care, they get their income tax anyway plus the Federal and provincial taxes no matter what. Another relevant example about Air Canada, I frequently fly to the North of British Columbia (Fort Saint John) on business. The cost of a flight to Fort Saint from Vancouver (flight duration of 75 minutes) is $650! you pay the same to get to Toronto or better yet the UK! why, because only Air Canada flies there. Nobody else is allowed to thanks to protective policies adopted here. Even by North American standards, it would cost me 30% less on average to buy anything in Seattle which is less than 2 hours drive from Vancouver just because its in the States and not in Canada. I learnt that the hard way. 3-One of the comments above was complaining about the Etisalat/Du duopoly and how it’s expensive. Well, I tell you what, here in Canada, we have more service providers but mobile charges in the UAE are less than one third of that in the UAE. Basically, I spend the same amount of in Canadian Dollars of what you spend in Dirhams and considering the currency exchange of about 3.5 Dirhams for one Dollar, you should count your blessings. I get charged for incoming calls and even incoming text messages. Notice incoming and not only outgoing. Any plans by Emirates to fly to Vancouver are most welcomed and I’m sure would be commercially viable too. People are sick and tired of Air Canada. Its not only me whom is fed up with that. Cheers, Sam