Air Canada's arriving in Auckland - how cosy will it get with Air NZ?

Air Canada will use a Boeing 787 Dreamliner for its summer services to NZ. Photo / Supplied

Fast-growing Air Canada will begin summer flights here next week and there are signs it will deepen ties with Star Alliance partner, Air New Zealand.

The Canadian airline - which has former Air NZ boss Rob Fyfe on its board - will start its four times-a week service between Auckland and Vancouver next Saturday.

Flights will run through until late March.

Both airlines say there are moves to deepen ties with each other. This is made easier by being in the same global airline bloc and with a mutual interest in being able to offer onward domestic flights to passengers in each other's countries.

Air Canada's general manager for Australia and NZ, Vic Naughton, said the push into this country comes after a period of rapid expansion during the last decade.

Air Canada general manager Ausrralia and NZ Vic Naughton. Photo / Supplied

During the last four years alone capacity had grown by 40 per cent.

''It's been hugely expansive. It's part of the wider strategy and this region is pretty important.''

There had been a drive into Australia where seasonal services had grown to year-round quickly. Weekly frequencies had also increased quickly in the Australian cities it serves from Vancouver; Sydney, Brisbane and Melbourne.

Naughton said the strategy was deliberate.

''We do launch seasonally and get it established and then grow it to daily,'' he said.

Air Canada has revamped its Business Class cabin as part of an airline overhaul. Photo / Supplied

This was a possibility in New Zealand if the market was strong enough.

''We'll see what happens in the future.''

Naughton said the airline behaved ''rationally'' and was not going to trash the market by slashing fares.

''That is definitely not our strategy - we're very much a very profit-focused airline. We have to make money, we owe that to investors, you'll notice that when we launch flights the pricing, while it has come down, hasn't been trashed at all.''

A fare comparison flying Auckland-Vancouver economy return at the end of January shows Air NZ at $1902 while Air Canada is $1551.

Air Canada will fly a 255-seat Boeing 787-8 Dreamliner on the route while Air New Zealand flies daily throughout the year using a 787-9 aircraft.

The two airlines could get closer than their Star Alliance partnership, which includes codeshare on each other's planes and airpoints benefits.

Former Air NZ boss Rob Fyfe has been on the Air Canada board for two years. Photo / Doug Sherring.

''When we launched the route we put it out there we are in discussions about strengthening the partnership,'' said Naughton.

In February the airlines finalised a Memorandum of Understanding pursuing expanding its current alliance arrangement to strategically co-operate - subject to regulatory approvals.

''There hasn't been progress, we're still in discussions about the future shape of the relationship - we're still partners and friends but who knows what will happen in 2020.''

Air New Zealand's acting chief executive Jeff McDowall last week said his airline aimed to at the minimum have a deeper code-share relationship with Air Canada.

This would not be a joint venture where airlines can co-ordinate pricing and share revenue but use each other to feed customers into their domestic networks.

''They're bringing their distribution strength and their marketing muscle to it, so there'll be more Canadians coming to New Zealand - the market will grow in proportion to their capacity,'' McDowall said.

Naughton said forward bookings his airline was monitoring showed almost 20 per cent growth in tickets sold in New Zealand over summer across both airlines, showing his airline was not cannibalising the market. Most of the traffic would be flying south out of Canada, a country of around 38 million.

Vancouver is a gateway for cruising and rail travel in Canada. Photo / Supplied

To the end of September the number of arrivals from Canada was up 6.5 per cent to 74,000 and tourists are generally high-spending, who stay long periods and travel to the regions.

In October Air Canada reported record third-quarter revenues, though its profit fell compared to a year ago as it coped with the grounding of three dozen Boeing 737 Max aircraft, two-thirds of which had been flying before the stop order.

Profit for the September quarter slipped to C$636 million ($735m) compared to third quarter 2018 of $702m.

While it has been disrupted by the Max issue, it uses GE engines to power its Dreamliners so isn't suffering the same issues as airlines with Rolls-Royce Trent engines used by Air NZ and other carriers that need more frequent maintenance and repairs.

Naughton said Air Canada was pursuing a similar strategy to Air NZ from their home countries. Both were able to tap into a large neighbours to help fill planes, an approach familiar to Fyfe who has been on the Canadian board for the past two years.

''Our strategy is largely due to being close to the US and being able to take some of that traffic for our hubs. There probably the alignment - Rob was there with a similar strategy.''

He said Vancouver - a 13-hour flight from Auckland - had positioned itself as an excellent Pacific gateway and that's been part of Air Canada's strategy and overall expansion.

An Air Canada Boeing 787 Dreamliner. Photo / Supplied

Kiwis bound for cities such as New York could clear US immigration in Vancouver.

''We all know what the experience of US airports can be and we've tried to make a hub out of Canadian airports and avoid the red tape through the States.''

Executive general manager at Helloworld Simon Mckearney welcomed the service.
''Vancouver is a wonderful city but also a gateway to so many add-on trips such as cruising and of course the Rocky Mountaineer rail.''

While the service was aimed at inbound visitors, Kiwi consumer would benefit.

''Despite being an Alliance partner, like any competitive route we will see prices fall,'' said Mckearney.

The airline

• Air Canada is among the 20 largest airlines

• Employs 36,000 people worldwide.

• Its corporate headquarters are in Montreal.

• Launched 29 new routes in 2018, including 11 new international routes.

• Direct services to 220 destinations

• In 2018 Air Canada Express carried nearly 51 million passengers (Air NZ carries 17m)