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Air CanadaTimothy Stake

Air Canada has renewed its partnership with Jet Airways (India) Ltd., a strategic move designed to keep their Canada-India route competitive against Emirates Airline.

Effective Feb. 21, a new three-year pact kicks in, ensuring that travellers will be able to continue booking seats on an Air Canada plane from Toronto to connect onto Jet at London's Heathrow Airport, from where Jet then flies to Mumbai. Air Canada and its Star Alliance partner, Germany's Deutsche Lufthansa AG, also serve the Canada-India market through their Frankfurt hub.

Air Canada signed its first partnership pact with Mumbai-based Jet in 2008, clearing the way for the carriers to sell tickets on each other's flights on the Toronto-Mumbai route. But Emirates, which launched its Toronto-Dubai service in October, 2007, introduced the Airbus A380 double-decker aircraft to the route in mid-2009, stepping up the battle against Air Canada and its allies.

Emirates, owned by the Dubai government, competes for passengers by offering service between Toronto and India via the Gulf carrier's Dubai hub. Last fall, Ottawa rejected requests from the United Arab Emirates for more Canadian landing slots. Emirates currently has three flights a week on the Toronto-Dubai route, but wants daily landing rights at Canada's largest city.

Emirates has said that its expanded presence in Canada would broaden consumer choice and generate a wide range of spinoff benefits for the Canadian economy.

But Air Canada needs to shield the Canada-India air corridor from further incursions by Emirates because the Montreal-based carrier is eyeing non-stop service to New Delhi, said Rick Erickson, an aviation consultant who heads Calgary-based RP Erickson & Associates.

In 2007, Air Canada cancelled its own Toronto-New Delhi service, through Zurich, but Mr. Erickson said the economics will be vastly improved when the Boeing 787 Dreamliner is introduced within three years to the fleet of Canada's biggest carrier.

The fuel-efficient 787 will make sense for long-haul flights that were uneconomic in the past, when Air Canada deployed gas-guzzling planes that had too many seats to be profitable for certain foreign markets, notably India, he said in an interview Friday.

Air Canada expects to start receiving Boeing 787s by late 2013, though it could be delayed into 2014, given production snags at the aircraft maker, analysts say. In the meantime, until the Dreamliner arrives, Air Canada is keen to keep Emirates at bay.

"The 787 is going to be a real game changer for Air Canada, but the airline needs to protect its market share on the Indian subcontinent because Emirates wants to take traffic away," Mr. Erickson said.

On Friday, Air Canada reported that its transatlantic routes saw a 4.1-per-cent increase in traffic in January, compared with the same month in 2010. Over all, Air Canada's worldwide load factor - the proportion of available seats filled by paying customers - climbed to 78 per cent in January, up from 77.5 per cent a year earlier. Air Canada's monthly traffic, including routes flown by regional affiliate Jazz Air LP, gained 9.1 per cent and its seat capacity increased 8.4 per cent.







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