Canada expanded air-service rights with Saudi Arabia and the United Arab Emirates in December 2025, creating room for more passenger and cargo flights between the countries. That could bring new competition on some routes, but it does not mean airlines have announced or started new services—or that fares have already fallen. Air Canada’s reported response was that it is competitive “with the best in the world.”
What changed in the Canada–Saudi Arabia and Canada–UAE agreements?
Transport Canada’s December 2025 announcement expanded the number of flights airlines may operate under the bilateral agreements. These are legal entitlements: airlines still decide whether to use them and which routes to serve.
| Agreement | Passenger-flight allowance | Change | Cargo rights |
|---|---|---|---|
| Canada–Saudi Arabia | Up to 14 flights per week per country | Up from four per week per country | Unlimited all-cargo flights, up from three per week per country; open fifth-freedom rights for all-cargo services |
| Canada–United Arab Emirates | 35 flights per week per country | 14 additional flights per week per country | Cargo rights expanded; the announcement does not specify a comparable weekly cargo cap in the cited summary |
Transport Canada said airlines could begin offering services under the expanded agreements immediately. That means the new capacity is available under the agreements; it does not confirm that a carrier has scheduled a particular flight. The announcement concerns international traffic rights and does not say foreign airlines may operate domestic Canadian routes. Transport Canada’s announcement describes the changes.
What did Air Canada say?
CBC reported on January 5, 2026, that Air Canada spokesperson Peter Fitzpatrick said the airline is competitive “with the best in the world.” He also said Air Canada’s agreement with Emirates lets it carry connecting traffic beyond Dubai on its Toronto–Dubai flight. Those are Air Canada’s claims, as reported by CBC; they do not establish how the expanded rights will affect competition or fares. CBC’s report, republished by Yahoo News, contains the attributed comments.
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Air Canada has also offered a broader account of competition in Canada. In a statement delivered to a parliamentary committee on May 2, 2024, vice-president David Rheault said, “At the outset, I’d like to underline that the Canadian air travel market is highly competitive.” The company said at the time that it served more than 180 airports worldwide, including 50 in Canada, and was the only carrier serving every province daily year-round. Those are dated company-reported figures, not a current schedule check. Air Canada’s statement sets out its position.
Could the agreements lower airfares?
They could put competitive pressure on airlines if carriers use the added rights to offer flights on routes where they compete. The effect would depend on which airlines add service, the cities they connect, how often they fly and the alternatives travellers already have. The agreements alone do not establish that fares will fall, or by how much.
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The Competition Bureau’s June 2025 airline market study found that when one new competitor entered a route between two cities, fares on that route were 9% lower on average. That is a finding from the Bureau’s study, not a forecast for these bilateral agreements: the study’s route-level result does not show that new service under the expanded rights will occur or produce the same outcome. The Bureau’s release summarizes the finding and recommendations.
Why does international competition matter to Canada’s airline market?
More flights from overseas carriers could give travellers additional choices on international journeys and connecting itineraries. The impact on Canadian airlines may be strongest where services overlap or compete for connecting passengers. More capacity does not automatically mean a new nonstop flight from a Canadian city, a cheaper ticket, or better service on every route.
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The Competition Bureau described Canada’s domestic airline market as highly concentrated and new competition as fragile. It reported that Air Canada and WestJet together account for roughly half to three quarters of domestic passenger traffic at major airports. That domestic-market context helps explain why policymakers may consider competition, but it is not an assessment of the December 2025 agreements or proof of their effects. The Bureau’s June 2025 market-study report made ten recommendations, including competition-focused aviation policy, consideration of international capital and experience, and measures to improve access in northern and remote markets.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What should travellers watch for?
For a specific trip, the practical change begins only when an airline publishes a route and schedule. Travellers comparing options should look at the complete itinerary and fare conditions rather than treating expanded entitlements as an immediate price change.
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- Route: Check whether a carrier has announced service between the cities you need, rather than assuming added rights mean a new nonstop flight.
- Schedule: Compare departure times, days of operation and connections; legal capacity does not specify frequency on any particular route.
- Total fare: Compare the full price and applicable baggage, change and cancellation terms for the itinerary.
- Connection: For journeys beyond Dubai or another hub, check which airline operates each leg and how the itinerary is ticketed.
Transport Minister Steven MacKinnon described the agreements as “a win for Canadian workers, businesses, and travellers alike.” That is the government’s rationale for expanding the agreements, not an independently measured outcome. Which carriers will use the additional rights, what routes they might announce and whether fares or service will change remain unsettled in the cited announcements and reports.
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