Air deals will boost links with China, Australia
Agreements improve cities served, cargo capacity, fares
Apair of air agreements signed last week between Ottawa and countries across the Pacific could significantly improve the tourism and trade flow between Canada and its partners in the region, with Vancouver a main beneficiary.
Last Wednesday, federal Transportation Minister Marc Garneau said Ottawa has reached an expanded air transport deal with China that will take effect immediately. The agreement allows Canadian airlines to serve 18 cities in China, an addition of six locations. Chinese airlines also receive access to 18 cities in Canada in the deal.
Just a day later, Garneau’s office announced another expanded agreement, this time with Australia. The Ottawa-Canberra deal is more extensive: It doubles Canadian and Australian airlines’ allowed seat capacity on routes between the two countries to 6,000 per week, with another expansion to 9,000 by next December.
The agreement with Australia also includes the removal of some pricing requirements, which officials said should make fares “more flexible” for Canadians flying to cities like Sydney, Melbourne, Brisbane and Perth.
A separate item also allows airlines to operate all-cargo services between the two countries without capacity restrictions.
While the agreements do not mention YVR by name, the majority of flights currently (or planned to be) linking Canada with these two countries have Vancouver as its Canadian point-of-contact.
In addition to the recently announced Air Canada service between YVR and Brisbane (slated to start next summer), Vancouver has flights to Sydney, Beijing, Shanghai, Hong Kong, Guangzhou, Chengdu, Shenyang, and Kunming.
In comparison, Toronto currently has flights to Sydney, Beijing, Shanghai and Hong Kong, although it will likely receive a good-sized portion of the capacity announced in the agreements last week.
Montreal is the only other Canadian airport with either a direct Chinese or Australian flight — Air China’s service to Beijing that starts this month.
Combined, 1.9 million travellers flew these routes last year, 1.5 million to China and 400,000 to Australia.
The deals also coincide with talks of growing economic ties among these countries: Canada and Australia are both parties to the recently ratified Trans-Pacific Partnership, while Canada and China already share commodity-specific trade agreements (and there has been a push by certain groups in both countries for a comprehensive freetrade agreement).
Attracting some of the newly announced capacity to YVR will also help the airport reach its strategic goal of linking the Asia-Pacific market to Latin America, a process that took a significant step forward this month with AeroMexico’s service to Mexico City. The more traffic it can attract from Asia — especially China — the more airport officials can leverage that passenger traffic to attract a carrier to offer flights to Central and South America.
It is not a given that the new air agreements will result in increased traffic for Vancouver, although it seems likely. Competition in the industry is fierce, and Calgary and Toronto will likely be pushing for some of the announced capacity.
The Calgary airport, for its part, opened a second runway last year, and a two-millionsquare-feet international terminal is under construction (completion has been pushed back to next fall). There are currently only a few flights to Asian destinations — a thriceweekly Air Canada service to Tokyo, and seasonal Korean Air charters to Seoul — but Calgary will be looking to expand its routes in the near future.
Then there’s Pearson International in Toronto, already Canada’s busiest airport, which has consistently added Asian destinations as more airlines look to link Eastern Canada directly with the AsiaPacific.
It also has more passenger traffic to leverage, with 37.5 million total passengers in 2014 compared to 18.9 million at YVR.
Pearson is also Vancouver’s biggest domestic competition for cargo flights, with the Toronto airport racking up 356,448 tonnes last year to Vancouver’s 217,001. (No other Canadian airport broke the 100,000-tonne threshold, although Montreal’s two airports combined handled about 140,000 tonnes.)
So it remains to be seen, when airlines choose to act on these new capacities, how much of the pie Vancouver will receive while there are growing choices within Canada for air carriers to choose from.