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Thu 11 Nov 2010 12:48 PM

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Canadian protectionism needs to end

The country's position on UAE landing rights is a bad joke, writes Damian Reilly

Canadian protectionism needs to end
OTTAWA, ON - JULY 01: A Canadian flag flies during Canada Day celebrations on Parliament Hill on July 1, 2010 in Ottawa, Canada. The Queen and Duke of Edinburgh are on an eight day tour of Canada starting in Halifax and finishing in Toronto. The trip is to celebrate the centenary of the Canadian Navy and to mark Canada Day. On July 6th The royal couple will make their way to New York where the Queen will address the UN and visit Ground Zero. (Photo by Chris Jackson/Getty Images)
Canadian protectionism needs to end

Canadians aren’t famous for their sense humour, but their government’s position on UAE flights into their country has long looked like a bad joke.

Seven flights a week and no more has been its position despite repeated requests from UAE carriers for more landing slots. As things stand, Emirates flies four times a week to Toronto, and Etihad three times. Those flights are enormously oversubscribed, to the point that it is not uncommon to find passengers on Emirates or Etihad flights to Chicago or New York flying with the sole intention of connecting to Canada as soon as they land. Emirates operates an A380 to Toronto, all the better to maximise its capacity, and if there was something twice the size, it would send that. Of course it would.

This week, at long last, the UAE government decided it had had enough of Canadian stubbornness, and decided to try an approach that is less carrot and more stick: from the beginning of next year Canadians hoping to come to the UAE will need a visa. Last month it told the Canadian military to vacate a base it uses in the emirates, too. The visa move, which will be intensely irritating for the many thousands of Canadians who like to visit or do business in the UAE, was a surprise, but a long overdue surprise.

Canada won’t let the UAE’s carriers fly to its country any more than seven times a week because it knows they offer a massively better service to customers than their own benighted Air Canada, and so the domestic airline would suffer as a consequence. It’s protectionism, plain and simple. Lax Canadian immigration policies have meant over the decades the country has become home to millions of people from the Levant or Indian Subcontinent. There are people, then, all over the countries in those regions who would like to visit their relatives in Canada, and vice versa. Emirates and Etihad offer a far superior network of destinations to enable them to do exactly that than does Air Canada. In fact, Air Canada does not even fly to the UAE. It flies to India instead.

It is understandable to wish to protect your national carrier, but at what cost? Almost all other countries in the world have come to realise that while it is one thing to let your domestic airline lose money in a fair fight against foreign airlines, it is another to kiss goodbye to the millions of dollars that the new arrivals on competitors’ airlines might spend.

That has certainly been the case in Europe. The airlines there don’t like it, and sound increasingly insecure while pronouncing themselves at the “crossroads of the world”, but the governments there know it is better to have the increased tourist and business traffic than not.

Countries don’t put a limit on the number of ships, packed with either cargo or passengers, that can dock at its ports, so why planes?

Since the change of visa regulations there has been much conjecture — notably by the readers of arabianbusiness.com — that the diplomatic spat might escalate to the point that Canada prevents UAE carriers from using its aerospace, a move that many seem to believe would affect UAE carriers’ ability to fly to North America. It wouldn’t, but industry insiders say they do not think it will come to this. The spat is exactly that, and at the next round of negotiations, it is expected a compromise will be found.

The UAE is Canada’s nineteenth biggest trading partner and biggest export market in the Middle East. In 2008 bilateral trade stood at $1.7bn. In the grand scheme of things, it is not a huge amount, but it would be wrong for the two countries to continue to be on no speakers over something as silly as protecting Air Canada because it is not able to compete in a free market.

The aviation unions in Canada must be more formidable than their airline is.

Damian Reilly is the editor of Arabian Business.

Marco 9 years ago

Canada banning all UAE flights wouldn't prevent UAE airlines from flying to North America--you're right. It would, however, make it much more costly and needlessly inefficient to fly here. Try flying non-stop to places like Los Angeles--impossible without the use of Canadian airspace. I am critical of my government for protecting Air Canada (Emirates is, by far, the superior airline) but I am equally critical of the UAE government for acting so childishly. Canada has a few tools in its retaliatory arsenal--we can ban ALL UAE air traffic (the province of Alberta has more oil than the UAE anyway, Canada doesn't need oil unlike the US), and under NAFTA rules, if Canada restricts an import of any good--the US and Mexico are obliged to follow suit (this happened last when Canada banned Brazilian beef imports in the late 1990s; the US and Mexico followed suit--causing very noteworthy damage to the Brazilian cattle industry). I hope a compromise can be reached as I love Dubai!

Canadian Expat 9 years ago

Canadians aren't famous for their sense of humor?

John Candy, Dan Aykroyd, Jim Carrey, Michael J. Fox, Lorne Michaels, Ryan Stiles, Tom Green, Phil Hartman, Eugene Levy, Howie Mandel, Colin Mocherie, Mike Meyers, Russell Peters, Leslie Nielson, Catherine O'Hara, Dave Foley, Brent Butt, The Kids in the Hall, The Second City, Yuk Yuks, Just for Laughs, This Hour has 22 Minutes, Royal Canadian Air Farce, For Better or For Worse, and Ed the Sock would disagree.

If any country knows how to look at itself and laugh it is Canada. Well researched ...

George 9 years ago

The UAE has no right to talk about protectionism when they don't allow other telecoms to enter this market. The telecom costs and services here are diabolical and it'll eventually become a barrier to entry for businesses. UAE cannot dictate what industry is protected and what's not.

Additionaly, the UAE does not have the domestic traffic to justify these flights, both Etihad and Emirates make a living ferrying travelers between other countries.

David Smith 9 years ago

Hello from Vancouver!
Your airlines made a mistake - suck it up! They overbought in a busy market. The argument here is a red herring. Your airlines want the traffic BEYOND the UAE, i.e. India, Pakistan, SE Asia, Australia, NZ and Africa, and they will slash and burn the prices to put bums in the seats of the 380s. You have too many large aircraft, and some have no place to go.
Now you have already kicked out our respected armed forces. And by the way, I'm sure that you didn't just allow them to stay in the UAE for nothing!
Visas? Any Canadian who would now pay you to go to or through DXB is stupid and unpatriotic in my book. Now why not start a TRANSIT VISA for those that travel on your airlines so that we have the final coffin nail?!
I'm in the travel business in Vancouver and I stand by all opinions that I've given here.
Your behaviour is insulting - not much better than a bully.

Mayola 9 years ago

Damian, with regards to your comment: "In fact, Air Canada does not even fly to the UAE. It flies to India instead." I think you have missed the point completely. UAE is a hub and most of the passengers heading to Canada & transiting thro' UAE are from India. Indians from the UAE who have migrated to Canada for work, study or citizenship reasons will go back to India to visit family and friends. The same is true for expats of other nationalities.
You can't compare India's 1.2 billions with UAE's 4+ millions. Its a no-brainer why Air Canada will choose India over UAE. Instead you should have asked why Air Canada flies to Lebanon or Syria instead of UAE. Compare like for like. But then again Lebanese or Syrians will also go back to their home countries to visit family and friends...

Reader 9 years ago

The following comment by Damian Reilly (editor of Arabian Business), "Lax Canadian immigration policies have meant over the decades the country has become home to millions of people from the Levant or Indian Subcontinent.", is disturbing in its conjecture and its latent right wing notions.
It is surprising that Canadian immigration policies are not "lax" to allow brits, irish, and the italians to immigrate to Canada.
Last time I checked, Arabian Business was not a right wing newspaper in the UK. Our dear editor would do good to realize the same. Many people feel that imports like him to the UAE with such views are also due to UAE's "lax import policy".

Robert 9 years ago

Neither the UAE or Canada emerge from this lengthy argument with any great credit but there is far more to the issue than this cheerleading opinion piece suggests.

The UAE airlines are not beyond using government protection - what happened to Jazeera Airways when flydubai started up.

Emirates is not flying people from Dubai - it is flying them via Dubai - the competition is between Emirates and Air Canada - it is between Dubai and Frankfurt Airports - the Star Alliance hub that Air Canada/Lufthansa seek to protect.

And there are other ME hubs - doing exactly what Emirates does - taking passengers from South Asia and flying then to North America. It looks like Canada has found a new friend in the ME - with a new aviation agreement signed with Qatar (after just 3 days of negoiation).

The trouble with the UAE is that it wanted so much from the Canadians and offered too little in return - diplomacy and trade are about finding mutual benefit.

Bob 9 years ago

Well said however there are only 6 flights per week. Mon, Tues, Wed Emirates. Tuesday, Thursday, Saturday Etihad.

Todd 9 years ago

Easily the most poorly researched article I have read on this site, and from the editor no less, a slow clap for you Mr. Riley. With respect to the issue at hand it has been handled incredibly poorly from both sides but in the end the UAE has made some critical errors. The knee jerk reactions from the UAE to kick out the military and place travel visa restrictions on Canadians has polarized this issue to the point that it will be political suicide for any Canadian politician to solve this without looking like they are giving in to blackmail, or pandering to a foreign nation. Kicking out our troops that are here fighting a war on terror isnt going to make it as easy as the good editor suggests to get back to that next round of negotiations. Insert burnt bridge here

Paul King 9 years ago

Maybe the UAE should offer Rogers (Canada's biggest telecoms operator) a license to compete with Etisalat & Du (not difficult) through an MVNO if they require further landing slots. Many are blowing the horn for Emirates but if there is one business the UAE should be able to dominate, it’s world travel. Do your geography… smack bang on the bullseye of the world. New planes, no towering legacy pension obligations and no debilitating & hostile regulatory regimes give Emirates a massive advantage. But, and a big but is can they continue to grow at the present rate with pilots & cabin crew stretched to the limit already and maintain the quality of the product. Interestingly, Emirates didn’t make the top 7 in the 2010 Airline of the Year awards and only won one of 57 individual awards as voted by 17.9 million air travellers from over 100 different nationalities.