Air Canada to increase China flights as Canada lifts restrictions

HONG KONG (Reuters) -Air Canada will increase direct flights between China and Canada from December, the news arm of China's aviation regulator said on Wednesday, after Ottawa last week removed a 2022 limit on how many services Chinese carriers could fly to Canada.

CAAC News, the official newspaper of the Civil Aviation Administration of China, said the increased flights between China and Canada would bolster trade and their economies and promote further recovery of China-Canada air transport.

Earlier this year, Canada agreed to stabilise ties with China, committing to "pragmatic" engagement with the world's second-largest economy, even as trade remained a point of bilateral friction.

So far, flights between Canada and China have not ramped back up after COVID-era travel restrictions ended, and are around 90% lower today than in 2019.

Air Canada, currently flying four times a week from Vancouver to Shanghai, will operate seven flights a week from Dec. 7 and will resume flying every day from Vancouver to Beijing from Jan. 15, CAAC news said.

Chinese airlines are accelerating applications for additional flights, the article added.

Air Canada did not immediately respond to a request for comment.

AIR SPACE CHALLENGE

In 2019 Air Canada was flying up to 35 times a week to China - including from Toronto - while Chinese carriers operated 76 direct round-trip flights, Cirium flight schedule data shows.

China later all but shut its borders to travellers due to a zero COVID policy and suspended many inbound flights.

Canada in February 2022 said Chinese carriers could fly only six round trips a week into Canada, and there could be no direct flights between Canada and Beijing.

These restrictions were lifted on Friday, a Canadian Transportation Agency order said.

"We value Canada's initiative and hope Canada will continue to create good conditions for normal personnel exchanges between both countries," Lin Jian, spokesperson at the Chinese foreign ministry, said at a regular news conference on Wednesday.

Canadian carriers are at a disadvantage to Chinese carriers because they have not been able to fly over Russian air space since the outbreak of war in Ukraine in 2022.

This makes Canadian flights to China out of Toronto, in Canada's east, commercially unattractive due to the extended flight time.

Chinese carriers have continued to take shorter northern routes to Europe and North America over Russia's vast airspace and have over time gained market share from non-Chinese carriers due to this competitive advantage.

FRICTIONS

Bilateral relations, established in 1970, turned icy in 2018 after Huawei's Chief Financial Officer Meng Wanzhou was arrested in Canada and China subsequently arrested two Canadians in China. All three were later released, but Ottawa's allegations of Chinese interference in Canada have kept relations strained.

Both countries have seen heightened trade friction in recent months after Canada said it was "absolutely" considering banning Chinese-made software in EVs, among measures to counter what it calls overcapacity and a security threat.

Beijing in September launched an anti-discrimination investigation amongst restrictive measures taken by Canada, including additional tariffs on Chinese electric vehicles, steel and aluminium products.

In July, Beijing agreed to normalise relations with Ottawa after Foreign Minister Melanie Joly's visit to China, the first by a Canadian foreign minister in seven years.

(Reporting by Farah Master, Beijing newsroom, Lisa Barrington, Sophie Yu and Eduardo Baptista; Editing by Christopher Cushing, Michael Perry and Ros Russell)