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Air China to launch three weekly Beijing-Montreal-Havana flights

On 20-Sep-2015 Air China expects to open three weekly flights to Montreal from its Beijing hub. Beijing will be Air China's second Canadian destination after Vancouver, which Air China serves with upwards of two daily 777-300ERs. Air China does not serve Toronto as Hainan Airlines applied for the Beijing-Toronto service before Air China, and China generally permits only one Chinese carrier on a long-haul route.

Hainan Airlines had planned to launch Montreal service in 2015 and even applied before Air China, but Air China received approval. Air China's Montreal-Havana service comes as the carrier seeks to find new markets after focusing much growth in recent years on the US. Air China will grow services to Australia/New Zealand and also launch service to Africa with potentially two destinations (Addis Ababa and Johannesburg), making Air China one of the few carriers to serve every inhabited continent.

The more curious part of the routing is the Montreal to Havana sector. So far Air China does not have fifth freedom rights between Montreal and Havana, meaning the Montreal-Havana sector – on Air China's 311-seat 777-300ER – will probably incur large losses. Even with local pick-up rights, Air China may struggle to achieve profitability on the sector.

Montreal hopes Air China's route will spur other Asian carriers to look more closely at Montreal, following the domino affect observed at Boston where JAL's Tokyo Narita service there was followed by Hainan Airlines to Beijing and Cathay Pacific to Hong Kong. Montreal and Boston have different demand profiles, with Boston being stronger by most accounts. But Montreal should be able to secure more Asian services in the medium-term.

Beijing had been Montreal's largest un-served Asian destination. With the Air China service, the next top un-served destination is Tokyo, according to OAG Traffic Analyser. However, given the large number of Tokyo connections via Toronto and Vancouver, a Montreal-Tokyo service may be too competitive. Shanghai and Hong Kong become the next largest un-served destinations and most likely to have service to Montreal although perhaps not immediately given lower demand than from Beijing.

Air Canada has not publicly expressed interest in linking Montreal with Shanghai and Hong Kong (it serves both Asian cities from Toronto and Vancouver), leaving potential service to foreign carriers.

For Shanghai, locally-based China Eastern will likely focus its eastern Canadian effort on Toronto. China Eastern has only three weekly flights to Toronto and is transitioning from an A340-600 operation to 777-300ER. China Eastern could be expected to grow Toronto before looking at Montreal. A new China-North America dynamic in 2015 is Hainan Airlines operating trans-pacific flights from Shanghai Pudong in addition to its Beijing hub. However, Hainan is so far only offering Shanghai-North America flights to destinations it already serves from Beijing.

Cathay Pacific has been rapidly growing in North America but likely considers Montreal too small for its all 777-300ER ultra-long-haul operation. The introduction of A350-1000s from 2018 changes the dynamic. Although Hong Kong has lower point-to-point demand from Montreal than Shanghai, Cathay would be able to take advantage of large connections beyond Hong Kong. Hainan Airlines would be more restricted in beyond Shanghai connections.

Although there do not seem to be any further Asian flights in Montreal's near future, the pace of change in the Asia-North America, and particularly from China, makes predictions dangerous. Air China's service will certainly bring more attention to Montreal and could accelerate other airlines' plans. Montreal does face the operational challenge of having a night curfew. Both Cathay Pacific and EVA Air have departures during midnight hours from Toronto. These flights arrive back in Asia in the morning, allowing a full work day or onward connections.

China shows solid visitor growth to Canada while Japanese and Korean arrivals fluctuate.

Over the long-term, the trend of Asian growth is unfailingly up and Montreal can reasonably anticipate at least steady growth from North Asia.