Strategy

The CEO Poll: Air war

CEOs side with Canadian officials in airline dispute with the U.A.E.

Business leaders give the federal mini-budget high marks.

The United Arab Emirates is engaged in a heated battle with Canadian officials to gain increased landing rights in Toronto for its airlines. But Air Canada has objected to more traffic from Emirates Airlines and Etihad Airways. Canadian CEOs, while typically in favour of greater trade liberalization, have cast a skeptical eye toward the U.A.E., according to a recent web poll conducted by Compas Inc., and view it as an unreasonable trading partner.

The dispute over landing rights is believed to be the cause of a request from the U.A.E. that Canada vacate an airbase in Dubai called Camp Mirage. That action revealed the Emirates to be an ‘untrustworthy’ trading partner, according to nearly two-thirds of the respondents. ‘If the Emirates do not want us to use their facilities, even more reason we should withdraw from the area completely,’ wrote one panelist.

‘The Emirates response was way too harsh, and tends to indicate the culture of their control over desires and preferences,’ wrote another.

On balance, however, the CEOs are in favour of more competition in the airline industry. More than half believe that foreign airlines should have unrestricted access to operate here, provided Canadian airlines have the same rights elsewhere. Competition would result in better prices and customer service for consumers, as well as an increase in the frequency of flights, the respondents believe.

‘The Canadian airline industry — especially Air Canada — has never been interested in competition,’ wrote one CEO. ‘I suspect the government plans to keep it that way.’

Others saw the competition issue as more nuanced, given the economics of the airline industry. ‘More competition is usually a good thing for consumers,’ according to one respondent. ‘However, with paper-thin margins in the airline industry, [our] government must protect Canadian businesses.’