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EU approves ‘open-skies’ deal with Canada

by investor on 31/03/09 at 12:55 am

The European Union gave the green light to a new air agreement with Canada Monday it hopes will bolster competition and air travel, and pave the way for even greater liberalization of the airspace across the Atlantic.

Efforts to raise the foreign ownership limits, however, are not expected to be ready in time for the deal’s signing despite Parliament passing the necessary amendments to the Canadian Transportation Act earlier this month.

The first phase of the air pact will allow European carriers to fly to Canada from any airport in their 27-nation bloc, and vice versa. It will replace a patchwork of bilateral agreements that were deemed to violate the EU’s efforts to establish itself as a single market by its high court.

Officials drafted a new pact in December, and the first phase is expected to be signed and implemented on May 6 in Brussels.

The move follows a similar arrangement between the EU and the United States, and has been lauded by Air Canada, WestJet Airlines Ltd., and Air Transat.

The EU expects the deal to increase the number of travellers across the Atlantic by nearly 40% within a “few years,” create 1,000 new jobs and generate about $120-million in economic activity. Roughly 9 million travellers flew between Canada and the EU in 2007, making it the second largest market behind the U.S.

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