Air Canada denies link between Air China joint venture and new label for Taiwan
Ross Marowits, The Canadian Press
Published Wednesday, June 6, 2018 8:24AM EDT
Last Updated Wednesday, June 6, 2018 4:02PM EDT
MONTREAL -- Air Canada's decision to label Taiwan's capital as being part of China has nothing to do with the joint venture with a Chinese national carrier that was signed Wednesday, says chief executive Calin Rovinescu.
Discussions about closer co-operation have been going on for years, long before Air Canada changed its reference to Taipei on its website after the Chinese government wrote to several airlines and western companies seeking the change.
"One's got nothing to do with the other," Rovinescu has been quoted telling reporters following the signing ceremony in Beijing.
"I'm not getting into Taipei. Today is not a day for discussions on Taipei," he said.
It's inconceivable that Air Canada's change of approach to Taiwan has nothing to do with the joint venture to a country that is a key part of the airline's growth strategy, said Charles Chang, president of the Taiwan Chamber of Commerce of British Columbia.
"They can't withstand the pressure of not making a lot of money because with this deal they're making a lot of money," he said from Vancouver.
Chang said he's also not pleased that unlike the U.S. government, Canada hasn't been unwilling to denounce China's move, saying instead that it won't intervene in what it calls a business policy.
"I'm very disappointed because I'm a Canadian. Not only am I Taiwanese, I'm also Canadian."
In a letter of protest sent to Air Canada last month, Chang said listing Taipei with a CN country code signifying China is not correct and misleading to travellers.
"Although officially Taiwan is the Republic of China, however as a separate political entity it is internationally referring to as TW, TWN or just Taiwan," he wrote.
Chang has said the airline could face a boycott from Taiwanese travellers on a route between Vancouver and Taipei that was started last June.
Air Canada's joint venture with Air China is expected to be phased in over the next six months.
It said the agreement deepens a long-standing partnership and provides customers with benefits including range of flights, fare options, flight schedules, joint sales including corporate and marketing programs, aligned frequent flyer privileges and an overall enhanced travel experience.
The airlines expanded a code-share agreement in May and implemented an expanded reciprocal lounge agreement for customers in December last year.
The new arrangement comes as China is set to become the world's largest aviation market by 2022.
"Having served China for more than 30 years, and as demonstrated by Air Canada's average annual capacity growth of 12.5 per cent over five years and the $2 billion of aircraft assets currently committed on routes between Canada and China, China is an integral part of our global network," Rovinescu stated in a news release.
Air China said its service to Canada has developed quickly and increased by nearly 18 per cent in 2017.
Over the last two years China's national carrier launched direct flights between Beijing and Montreal, while Air Canada started non-stop flights between Montreal and Shanghai.
The two carriers now operate up to a total of 52 trans-Pacific flights per week between Canada and China from Toronto, Vancouver and Montreal to and from Beijing and Shanghai.
The joint venture solidifies a key alliance over a region of growing importance that has faced the impact of competitive pressures, said Canaccord Genuity analyst Doug Taylor.
"We believe this will also serve to better rationalize the capacity between the two regions," he wrote in a report.