EU & Canada sign air deal leading to open skies

Canada’s airports hailed the recent completion of an historic air service agreement between Canada and the European Union as “welcome news” for travellers, shippers and those who work in the aviation and tourism sectors.

Air Canada cabotage codeshare partnership eighth freedom rights environmental issues financial turmoil

Canada’s deal with the European Union applies to the carriage of both passengers and cargo and is based on a loosening of Canadian restrictions on foreign ownership and comes at a time that Canada’s leading carrier, Air Canada, struggles withfinancial turmoil.

Specifically the agreement initially provides airlines “unlimited freedoms to operate direct services between any point in Canada and the 27-country EU trading bloc.”

Additional carrier rights take effect once Canada has taken the steps necessary to enable European investors to own up to 49 per cent of a Canadian carriers’ voting equity, up from 25 per cent currently. The Canadian government has already introduced such a proposal.

At a third stage, once both sides enable investors to set up and control new airlines in each others’ markets, passenger airlines will be able to fly onward to third countries.

The final stage will come once both sides complete steps to allow the full ownership and control of their carriers by the others’ nationals, and would provide carriers “full rights to operate between, within and beyond both markets, including between points in the territory of the other party,” a set of rights known as cabotage, or eighth freedom rights.