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Air Canada's Boeing 787 Dreamliner arrives at Toronto Pearson International Airport on Sunday, May 18, 2014. (Matthew Sherwood For the Globe and Mail)
Air Canada's Boeing 787 Dreamliner arrives at Toronto Pearson International Airport on Sunday, May 18, 2014. (Matthew Sherwood For the Globe and Mail)

Air Canada eyes Asian expansion with Dreamliner launch Add to ...

Air Canada is beefing up its existing Asian routes to lure Canadian families, while making plans for new destinations to tap into the growing middle class in emerging economies such as China and India.

The country’s largest airline plans to announce Tuesday that it will deploy the 251-seat Boeing 787 Dreamliner on service between Vancouver and Tokyo’s Narita Airport, and also assign the 787 on the Vancouver-Shanghai route.

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Air Canada has been relying on aging Boeing 767s, which each seat up to 211 passengers, on those two transpacific routes. But later this year, the carrier will begin bolstering its Asian schedule amid industry predictions that travel demand will surge in Asia over the next decade.

The long-term growth potential for Air Canada and other global carriers goes beyond the largest hubs.

“We’re not talking about the obvious Asian cities that have already been developed,” Air Canada chief executive officer Calin Rovinescu said in a wide-ranging interview aboard the Dreamliner during its launch flight from Everett, Wash., to Toronto.

“There are many cities in China where there are millions of people, and the middle class there is starting to fly for the first time, starting to afford air travel.”

Potential new non-stop destinations for Air Canada could include New Delhi, Mumbai and Guangzhou.

From the industry’s worldwide perspective, Asia is forecast to account for the bulk of growth in the aviation sector. “We fully expect Asia to be the main driver of air travel over the next decade. We’ve only been scratching the surface,” Mr. Rovinescu said.

In the Vancouver market, Asian-based airlines are battling Air Canada to capture a crucial portion of the market that focuses on consumers who fly to visit friends and relatives. The Toronto market, by contrast, attracts more passengers in business class.

Air Canada, which took delivery of its first of 37 orders for Boeing 787 Dreamliners over the weekend, will show off the plane in Toronto on Tuesday to frequent fliers and media. The carrier’s first Dreamliner is slated for service between Toronto and Tokyo’s Haneda Airport, starting in July.

New routes between Canada and Asia are expected to be announced as Air Canada examines the best use for more Boeing 787s to be delivered and possible schedule changes in the longer term involving the larger 777s already in the fleet.

Other Canadian cities want in on the Asian action, hoping that there will be new non-stop service, though the type of aircraft that would be used has yet to be determined. Civic officials in Montreal and Calgary have been lobbying for non-stop flights between their cities and Beijing, but Canadian and Chinese government representatives first have to agree on appropriate slots with commercially viable landing times.

Mr. Rovinescu, who has been Air Canada’s CEO for more than five years, said the Montreal-based carrier has rebounded since the 2008-09 recession hammered the airline industry.

There have been some tense moments on the company’s path to recovery, including reaching labour contracts that resulted in a tier of wages and pension benefits being reduced for new employees.

“Something needed to change. We needed to be able to create a lower-cost offering like we have with Rouge,” he said.

After a period of cost-cutting measures that transformed the airline, Air Canada is now entering a stage of growth and profitability while spending money wisely and being disciplined when making decisions, Mr. Rovinescu said.

He is also chairman of the Star Alliance of global carriers, which includes Air Canada, and in June, will begin his one-year term as chairman of the International Air Transport Association’s board of governors.

Mr. Rovinescu said he is pleased that two representatives from the Air Canada Pilots Association (ACPA) took part in festivities as the 787 flew from Boeing’s Everett plant to a Toronto hangar.

Captain Craig Blandford, president of ACPA, said the Air Canada CEO has been respectful of the union’s views and he is looking forward to productive talks in the future. ACPA’s chairman, Captain Geoff Wall, also boarded as a passenger on Sunday’s Everett-to-Toronto flight.

Some comments from Air Canada chief executive officer Calin Rovinescu’s interview with The Globe and Mail:

On labour relations

“Running a big organization like this is not going to meet 100 per cent of the expectations of every union leader and every unionized employee. That’s the nature of the beast. The unions are there to represent a perspective that is potentially in contrast to management’s perspective, and that is why there is dialogue that occurs.”

On airline alliances

“What we are seeing emerging is the battle of Star Alliance, Oneworld and SkyTeam. The alliances do create aspects of a seamless travel experience for frequent fliers, and they encourage loyalty. Star is still the strongest alliance.”

On halting plans to order the Bombardier C Series

“We think the C Series is a very good airplane, but we made the determination to deploy capital better and reconfigure the existing 777 fleet. We are very disciplined on capital.”

On global competition

“We’re total supporters of having open skies. There are reciprocal benefits for Canadian carriers into the U.S., as there are for U.S. carriers into Canada, provided there are slots. But where you have specific small market economies that are trying to access our market through their hubs, that’s where we disagree because there are no reciprocal benefits. We are against the notion of domestic market economies that are trying to gain connecting traffic over their hubs.”

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