From the Globe & Mail ....
Vancouver — Globe and Mail Update Published on Tuesday, Mar. 09, 2010 8:15PM EST Last updated on Wednesday, Mar. 10, 2010 8:41AM EST
After hearing about the United Arab Emirates' threat against a Canadian military base in the Persian Gulf, Calin Rovinescu decided he had finally had enough.
The chief executive officer of Air Canada unleashed a blistering verbal assault on Emirates Airline in Vancouver on Tuesday, lambasting his rival's recent assertion that more flights to Canada from Dubai will spark $480-million of annual economic activity and 2,800 new jobs. In a speech, he called the numbers “the stuff of fairy tales” and “subterfuge.”
Mr. Rovinescu said he was “troubled” that the UAE is trying to link more access for the Emirates Airline into Canadian airports to the extension of the lease on the Canadian military's Camp Mirage logistics base in the UAE. Established after 9/11, the base is a crucial staging area for the war in Afghanistan, but its lease expires this summer.
“That type of government intervention, I found unacceptable,” Mr. Rovinescu told reporters after his pointed speech to local business leaders in a luncheon speech at a downtown Vancouver hotel.
Emirates Airline is stated-owned by Dubai, one of the seven emirates that comprise the UAE. It is aggressively expanding internationally, trying to make Dubai a global airline hub, and wants to provide twice-daily service to Toronto, up from its current three flights a week, as well as service to Vancouver and Calgary from Dubai.
Mr. Rovinescu argued that while more competition looks good for customers, the long-term result would be “devastating” for the Canadian airline industry. He warned of fewer jobs, fewer cities served by direct connections to international destinations, and less economic activity.
“While its argument may be seductive, what Emirates' strategy will do is constrain the growth of Canadian airports by turning them from hubs into stubs at the end of a spoke that leads only to Emirates' hub in Dubai,” he said in his speech to the city's board of trade at a Vancouver hotel.
“Sure, you will be still be able to get to anywhere from Vancouver. But you will have to get there through Dubai,” Mr. Rovinescu said.
Two top Canadian politicians have given credibility to Emirates' efforts. The estimated economic gain, based on a report commissioned by the airline and prepared by consultancy InterVistas Consulting Inc., was publicly praised in the company's Feb. 23 news release by Alberta Premier Ed Stelmach, who said his province needs a direct connection to UAE “to stay competitive in the global economy.” B.C. Premier Gordon Campbell said “we need to capitalize on services like those offered by Emirates Airline to realize our full economic potential.”
Mr. Rovinescu, a corporate lawyer who became CEO of Air Canada 11 months ago, said his airline is expanding in Vancouver. Total capacity (known in the industry as “available seat miles”) is set to rise 3.3 per cent this July, bolstered by a 26 per cent increase to Pacific Rim countries. Daily service to Beijing and Shanghai begins in June, up from three weekly flights to Beijing and four to Shanghai.
Mr. Rovinescu said a Dubai-Vancouver Emirates flight could marginalize Vancouver as an international hub and threaten recently established international Air Canada routes like Calgary-Tokyo.
A spokeswoman for Mr. Campbell said on Tuesday that the B.C. premier's earlier comments stand.
An official response from Emirates Airline could not be obtained Tuesday because of time zone differences.
Vancouver – the closest North American city to China – wants to serve as a hub for Asia-United States air traffic and this summer the Vancouver Airport Authority starts a one-year trial in which Chinese travellers won't need a Canadian visa just to go through YVR en route to the U.S.
Larry Berg, CEO of Vancouver Airport Authority, was hesitant to endorse Mr. Rovinescu's entire view of Emirates Airline's potential impact, though he did say it is a “valid point” that Emirates wants to draw travellers to and through Dubai.
On potential “devastating” consequences for the Canadian airline industry, Mr. Berg said “Emirates would be just one more airline” and that there are “shorter ways to get to Asia” than through Dubai.
He said the most important thing for the Vancouver airport are border process issues with the U.S. and significant traffic growth is “within our grasp” if projects such as the China-U.S. traveller test are successful.
With files from reporter Brent Jang in Toronto