Air China, Air Canada sign joint venture agreement

Senior executives and staff members of Air China and Air Canada have a group picture taken at a ceremony in Beijing on Wednesday. Photo: Courtesy of Air China

Air China and Air Canada on Wednesday signed the first joint venture (JV) agreement between a Chinese and North American airline, deepening the two carriers' longstanding partnership.

It is the third JV agreement helping Air China expand its services after it previously signed JV agreements with Air New Zealand and Germany's Lufthansa.

The JV will enable Canada's and China's flag carriers, both of which are Star Alliance members, to expand their existing code-sharing relationship and deepen it by increasing commercial cooperation on flights between Canada and China, as well as on key connecting domestic flights in both countries.

"The move has further tapped Air China's internationalization strategy," Cai Jianjiang, chairman of Air China Ltd, said at the press conference announcing the agreement.

He also said that the flights between China and Canada are some of the most important long-haul routes for Air China, which has been developing rapidly in recent years.

In 2017 for example, its passenger traffic rate posted an increase of 17.8 percent.

Air China and Air Canada, as Star Alliance members, have built a foundation for profound cooperation, and under the JV framework, a wider range of products and quality services will be offered, as well as more flexible flight choices, favorable fare products and seamless travel experiences for customers, according to Cai.

Peng Haiping, managing director of international affairs and cooperation at Air China, told the Global Times that the JV agreement could even enhance cooperation among Star Alliance members.

He also said that after Air China's JV agreement was signed with Lufthansa, the airline's load factor and profit increased substantially.

Air Canada has served China for more than 30 years. Its average annual capacity growth rate reached 12.5 percent over the last five years and its current aircraft assets are now worth $2 billion, stated Calin Rovinescu, Air Canada's president and CEO.

As the JV is phased in over the course of the next six months, customers will be able to reap the benefits of exceptional travel options through optimized flight schedules, harmonized fare products, joint sales, including corporate and marketing programs, aligned frequent flyer privileges, reciprocal lounge access and an overall enhanced travel experience, according to a note Air China sent to the Global Times on Wednesday.

The carriers' recently expanded code-sharing agreement, effective from May 5, has increased the number of Canada-China connection flight opportunities for customers by a daily rate of 564, read the note.

In December 2017, Air China and Air Canada implemented an expanded reciprocal lounge agreement for customers and introduced the airlines' first joint frequent flyer promotion for their respective PhoenixMiles and Aeroplan members.

In the last two years, Air China launched flights directly linking Beijing with Montreal, while Air Canada launched new nonstop flights between Montreal and Shanghai to meet a growth in demand.

The two carriers now operate a total of 52 trans-Pacific flights every week between Canada and China, including flights to Toronto, Vancouver, Montreal, Beijing and Shanghai.

Newspaper headline: Great Wall to Great White North