Chinese Carrier Courts Canada

Hainan Airlines has been granted regulatory approval to serve Toronto non-stop from Beijing. Air Canada currently dominates routes from its home market to China. Routes News assesses the untapped opportunities for foreign carriers on the Canada-Asia sector.

Hainan Airlines will become the first Chinese carrier to offer a scheduled flight from Beijing to Toronto Pearson, after the Civil Aviation Administration of China's (CAAC) approval of its route request this week. The aircraft type and the weekly frequency have not yet been announced.

There are a number of carriers operating from Canada to the Far East and Hainan Airlines will face competition on the sector from Air Canada, which operates a daily B777 on the route.

The Toronto market is of significant interest to Hainan Airlines, as no Chinese-based carrier currently serves Toronto, whereas China Airlines, China Eastern and Air China each serve Vancouver. All outbound Toronto flights to Chinese cities are served by Air Canada.

Passenger data shows that between February 2009 and 2010, over 4.3 million O&D passengers flew from the Far East to Canada (IATA BSP data & Airport IS), a slight drop on the figures for 2008 and 2009.

On the basis of passenger volumes, the leading route on the Far East-Canada sector was Vancouver to Hong Kong, with over 162,000 passengers flying the route during Feb 09-10 according to Airport IS. This was split between Air Canada's daily service and Cathay Pacific's double-daily flights.

Vancouver: Canada's 'Asian Gateway'

Vancouver serves as the Canadian gateway to Asia as its geographical position on Canada's west coast means that flights to Asia have shorter sector lengths.

Vancouver currently offers 91 weekly services to seven Asian destinations.

The following table shows the airlines flying from Canada's three major airports to Asian destinations and their weekly frequencies:

Toronto Pearson

From Calgary International:

Source: Flightbase June 14-20, 2010.

Interestingly, Air Canada operates more Asian services from Vancouver than from its main Toronto hub, supporting greater O&D demand from Vancouver.

With a reported 60% of all new immigrants to Canada being of Asian origin, the demand for leisure and VFR travel is expected to continue to grow. This is coupled with the fact that investment between Asia and Canada is also on the increase. Illustrating this is the example of Japan, which is now the second largest importer into Canada after the United States. It is reported that 7.4% of Canada's nearly 35 million population is of Asian origin.

Unserved Market Potential from Canada

There are a number of markets that seem to have significant potential for new service from Canada to Asia. The leading unserved markets on the basis of O&D passenger numbers from February 2009-2010 are summarised in the table below:

Source Flightbase June 14-20, 2010

Air India serves Toronto from London Heathrow with strong O&D demand from the UK and a large Indian population that will fly the Air India brand to Canada. Other targets in the Asian market where the O&D numbers are not as high could be Kuala Lumpur or Jakarta, which would provide strong connectivity.