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

Canadian airlines could soon face pressure from customers to improve their services as the federal government opens its skies to more competition from the Middle East.

Ottawa is easing restrictions on the number of flights from Saudi Arabia and the United Arab Emirates after past diplomatic conflicts limited flights.

Aviation expert John Gradek said Middle Eastern airlines are considered the “envy of the world” because of the services they offer, which will require Canadian airlines to do more if they want to take on these foreign carriers.

“Canadian carriers are going to have to raise the bar and up their game to be able to compete,” said Gradek, a professor of aviation management at McGill University.

“It will push Air Canada, it will push WestJet and it might push our friends at Air Transat to look at the level of service they provide on the plane, as well as the amenities and the actual configuration of the planes.”

Canadian MPs and senators, through parliamentary committees, have studied a range of issues affecting the Canadian airline industry in recent years, including lack of competition, high fares, accessibility complaints and passenger rights.

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

In 2010, the Canadian government refused to allow more flights from the United Arab Emirates to protect Canadian industry. Air Canada said at the time that airlines like Emirates picking up Canadians and taking them to third countries with a stopover in Dubai, and there aren’t many reciprocal benefits for Canadian carriers.

The United Arab Emirates retaliated by banning Canada from a once-secret logistics base. Canadian troops used them 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 on the country to arrested activists and demanded their release.

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

“The global economy is being restructured. Canada is not going backwards,” Carney said after his visit to the United Arab Emirates on November 23.

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

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

The latest deal also includes up to 35 passenger flights per week from the UAE, up from a maximum of 21. Plus unlimited cargo flights from both countries. The reciprocal agreement will allow Canadian carriers to send the same number of flights to the Middle East.

“It’s all part of our ambition to continue to develop export markets, build and strengthen trade links and generally have more openness and more ability to deal with the rest of the world,” Mackinnon said.

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

Gradek says he believes the government’s new deal is better for Middle Eastern airlines because it allows foreign airlines to carry more Canadian travelers to hubs like Dubai and on connecting flights all over the world, including the Indian subcontinent.

By comparison, Canadian carriers can transport more travelers from the Middle East to hubs in Canada and on connecting flights to the United States, which Gradek said is a smaller market.

“I think foreign airlines will get a bigger piece of the pie,” he said. “I think Middle Eastern carriers will be much more present.”

Gradek also said Canadian airlines “will struggle to match” the experience that Middle Eastern airlines offer at competitive economy prices because they make a lot of money on premium seats, which offsets economic losses.

“They will fill the plane with cheap tickets for the economy section,” he said. “But they are interested in the premium market.”

In a statement to CBC News, Air Canada says it is already competitive “with the best in the world.”

“Yes, Middle Eastern airlines provide significant connecting traffic to areas such as the Indian subcontinent, but our agreement with Emirates allows us to route traffic beyond Dubai on our Toronto-Dubai flight,” wrote Peter Fitzpatrick, an Air Canada spokesperson.

In mid-November, Air Canada and Emirates announced they would extend their strategic partnership by three years until 2032. The two airlines agreed to market and sell tickets for the same flights and allow their customers to accumulate and redeem rewards through a joint loyalty program.

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

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