Air Canada is proposing to launch Toronto-Los Angeles-Sydney flights in the first half of 2007 following delivery of its first Boeing 777s. With flights from other Canadian cities connecting at Los Angeles, Air Canada estimates the new route will shave three and a half hours off its current flights to Australia from Vancouver via Honolulu.
Recent liberalisation of the Canada-USA bilateral paves the way for this proposal. Starting in September, Canadian carriers will enjoy unlimited fifth freedoms beyond the USA to any third country. That takes care of the US side, but Air Canada still must secure approval from Australia. This puts it in direct competition with SIA, which has long sought fifth-freedom rights from Australia to fly the same Los Angeles-Sydney nonstop route in reverse.
Australia and Canada must amend their bilateral before Air Canada can launch these flights. So far, neither country has revealed plans for talks.
Air Canada’s announcement has caused a considerable stir in the Australian government, which has been agonising for months over its oft-postponed decision on SIA. In response to complaints from Qantas that government-owned SIA enjoys unfair advantages, the government has agreed to review a number of aviation policies – ranging from tax allowances to foreign caps – before any decision on SIA access to the Pacific. A decision on that review has been delayed several times; it is now set for sometime during March.
A spokesman for Australia’s transport minister says Air Canada’s application will not affect Canberra’s policy review, but local reports suggest that other officials are more inclined to approve Air Canada than SIA, perhaps because they see it as less of a threat to flag carrier Qantas.
According to one lawmaker, who has been a Qantas supporter, Air Canada’s entry “diminishes the argument Singapore has for more competition”.
Qantas denies claims that the US-Australia route is underserved and thus hurting Australian tourism. Qantas executive general manager John Borghetti says the route’s main growth is fuelled by outbound Australian demand rather than the other way round. Nonetheless, with more frequencies planned, by this month Qantas is expected to be offering a record 40 weekly flights to the USA. This has prompted criticism from some that it is trying to pre-empt entry by any rivals. ■
DAVID KNIBB / SEATTLE
Source: Airline Business
