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Business Home > Archive
UAE-Canada flight deal talks crash

Haseeb Haider / 11 October 2010

ABU DHABI The UAE has expressed its disappointment over the failure of intensive negotiations with Canada for an agreement on expanding the number of flights between the two countries.

“It is unfortunate that this process has been so protracted and frustrating,” UAE Ambassador to Canada Mohammed Abdullah Al Ghafli said, in reference to the UAE-Canadian airline negotiations, detailed in a statement            by Wam.

“The UAE entered negotiations in good faith on the understanding that a solution would be reached and that constructive ideas would be brought to the negotiating table,” the statement added.

“The fact that this has not come about, undoubtedly affects the bilateral relationship.”

The UAE continues to support the development and growth of international trade ties across all sectors, with our partners and friends around the world, in the belief that such ties are the basis for strong strategic, according to the Ambassador.

John Siddharth CP, an aviation expert at consulting firm Frost & Sullivan, said Emirates Airline is currently limited to sharing six flights a week with Abu Dhabi’s Etihad Airways.

The UAE government was negotiating with its Canadian counterpart to increase the flight frequencies.

“The key drivers for the proposal were that increase in frequency could lead to an additional $480 million to the bottom line of economic development in Canada, apart from creating about 2800 new jobs,” he said.

Siddharth said that “Air Canada has been trying to recoup from the heavy losses it had incurred in 2008 and 2009 and on the other hand the entry of three more additional services from Emirates could be an obstacle to growth from the Airline perspective.”

“Though there would be new jobs and positive economic flow, it would not balance out in the long term perspective,” he said.

He said “there is also feelings that increase in number of services could stunt the growth of Canadian airports.”

On the significance of Canadian market to the two UAE airlines, Siddharth said that “it is very important that Emirates manages to enter into any of the big markets, failing which it would feel the pressure of under utilised A380.” According to recent statistics, the flights from Dubai to Toronto were about 90 per cent full, he said.

“In the present scenario it would not create a huge impact but considering the medium and long term perspective, it is very important from Etihad and Emirates Airline stand point,” Siddharth said.

Over 27,000 Canadians are living in the UAE, with around 200 Canadian firms active in the country.



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