Quick Take: Air China, Air Canada Partnership Takes Off

The flag carrier airlines of China and Canada on Wednesday agreed to enlarge commercial operations on their flights, the first such cooperation between a Chinese and a North American airline.

Air China Ltd. and Air Canada said in a joint statement that the pact will be phased in over the next six months to enhance their commercial operations, such as offering travelers flexible flight choices, favorable fares, corporate and marketing programs, aligned frequent flyer privileges and reciprocal lounge access.

The statement didn’t reveal the financial terms of the deal.

Air China has struck similar pacts with Air New Zealand Ltd. and Deutsche Lufthansa AG from Germany.

Foreign airlines have sought to tap into the Chinese aviation market, which is projected to displace the U.S. as the world’s largest by 2022, according to the International Air Transport Association in December. Delta Air Lines Inc. in 2015 bought a 3.6% stake in China Eastern Airlines Corp. Ltd., and American Airlines Group Inc. also paid $200 million for an unspecified interest in China Southern Airlines Co. Ltd. in 2017.

“Our joint venture agreement with Air China ... is an important strategy in our global expansion as it significantly increases Air Canada’s presence,” said Calin Rovinescu, Air Canada’s president and CEO.

Canada’s biggest airline said its routes between the nations averaged annual capacity growth of 12.5% over the last five years, and it has committed $2 billion of aircraft assets to service the journeys.

Air China meanwhile said its China-Canada passenger traffic expanded 17.8% last year.

In the last two years, Air China has launched flights directly between Beijing and Montreal, and Air Canada has introduced new nonstop flights between Montreal and Shanghai to meet demand.

The two carriers now operate as many as 52 trans-Pacific flights per week between the two countries.

Contact reporter Jason Tan (jasontan@caixin.com)