Thank you very much, Mr. Chairman, for having us here today.
It is a pleasure for me to address you today.
I am joined today by David Waugh, as you mentioned, who is our director of international regulatory affairs, and Fitti Lourenco, our director of federal government affairs.
I'm very pleased to see the committee's focus on international global trade growth. At Air Canada we see ourselves as a global Canadian-based company, and we recognize that a substantial portion of our future growth is going to be international. Moreover, we believe that a strong airline sector and effective air links to our key trading partners are key building blocks for Canada as we seek to grow international trade.
I'll tell you a little about Air Canada.
We're Canada's largest airline. We're the largest provider of scheduled passenger services in the Canadian market, the Canada-U.S. market, and the international market to and from Canada. We're also the 15th largest airline in the world.
In 2014, Air Canada, with our 27,000 employees, carried 38.5 million passengers. We offered direct passenger service to 186 destinations on five continents, which included 61 Canadian cities, 50 U.S. destinations, and a total of 75 cities in Europe, the Middle East, Asia, Australia, the Caribbean, Mexico, and South America.
We're the only international network carrier in North America to receive a four star ranking from the independent U.K. research firm, Skytrax. Last year, for the fourth year in a row, we were selected best airline in North America in a worldwide Skytrax survey of more than 18 million airline passengers.
We recognize that our customers are looking for global access to accommodate this. In 1997, we joined the Star Alliance. We're one of the founding members of that alliance. It's a global network partnered to seamlessly serve our customers. In addition, we have joint venture agreements with the U.S.-based United Airlines and the Lufthansa group of airlines over the Atlantic Ocean, anti-trust immunity to pursue a joint venture with United Airlines on the U.S. transborder market, and we intend to enter into a joint venture with Air China over the Pacific Ocean.
We are expanding our fleets with announcements to acquire additional Boeing 777 and 787 aircraft. This will allow for further expansion in the coming years, including our recently launched routes to Panama City and Rio de Janeiro, and our recently announced service to Amsterdam, Delhi, and Dubai.
We fully support the objectives of the global markets action plan, and we agree that the approach set out in that plan is appropriate. When you look at the regions set out in that plan, these closely match our current and future route ambitions. Markets that are identified as established constitute a significant portion of our route network with 1,657 weekly flights to every region, except New Zealand, which we operate via code share via Vancouver on Air New Zealand. If you include code-share services to these established nations, it's almost 18,849 flights per week. In the markets where there are broad Canadian interests, we fly to all but four of the listed countries with 133 weekly flights operated by Air Canada, which grows to 951 flights if you include Air Canada code shares.
Whenever we seek to serve a new international destination, the first things that must fall into place are the bilateral air rights that are negotiated by the Government of Canada. These are done through bilateral air transport agreements, ATAs. As a result, these agreements on traffic rights are in some small way not unlike trade agreements with other countries. Other countries certainly view air traffic negotiations as a means to benefit their own airlines and their aviation industry, including in some cases government-owned airlines.
The Government of Canada's blue sky policy was adopted in November 2006, and is an approach to bilateral air negotiations, which seeks to grow in a balanced manner and in consideration of the interests of all stakeholders, and avoids a one-size-fits-all approach. We strongly support the continued promotion of the government's blue sky policy, and note that it has brought significant growth to Canadian airlines and airports, resulting in better services to all Canadian communities. Specifically, Air Canada has consistently pushed for improved bilateral access to large and important markets, such as the European Union, Brazil, Japan, and China, asking for increased capacity, frequencies, access to new destinations, and access to new code-sharing opportunities, among other benefits.
Through the increasing liberalization of our air industry, our country has made a number of achievements since 2006. Canada has concluded air transport agreements with over 80 countries, and the number of bilateral partners has gone from 72 to 112. We have open skies-type agreements with close to 50 countries, such as the United States, the countries of the European Union, as well as Brazil, New Zealand, Jamaica, and South Korea. We also have expanded agreements with 20 countries, which include China, India, Japan, Colombia, Peru, Turkey, Egypt, Singapore, and Mexico. We have first-time agreements with 21 countries, such as Equador, Uruguay, Bangladesh, and Ethiopia.
As a result, over 70% of the traffic to and from Canada is with a country that has an open skies agreement with Canada. This rate climbs to well over 90% when you factor in bilateral arrangements where capacity is available but Canadian and foreign airlines have not yet fully used the available capacity.
The blue sky policy and these agreements are why the World Economic Forum has ranked Canada within the top 10% of the 144 countries surveyed when it comes to air access.
Despite the success of the blue sky policy, some continue to advocate for greater liberalization. We believe that an across-the-board one-size-fits-all approach to the negotiation of open skies would have detrimental effects. Without ensuring that these agreements are based on a level playing field and that they will have balanced benefits for both countries, it is clear that local airline services and passengers will be negatively impacted.
In conclusion, I'll leave you with three constraints to future growth that I would ask the committee to give some consideration to.
First, while we are in the top 10% when it comes to air access, the same study by the World Economic Forum found that we are 135th of 144 countries when it comes to taxes and fees. I know this isn't the committee's primary focus, but it is a significant barrier to competitiveness and growth in the aviation sector not only for Air Canada, but for other international airlines seeking to serve Canada. The user-pay model that the government has pursued since the 1990s is simply not in line with international standards. It is in effect a tax on international trade and it needs to change.
Second, an issue that's more directly in the committee's wheelhouse is visas. Whether it's a Brazilian businesswoman who needs to come to Vancouver for meetings, or a Chinese businessman who needs to get to Cleveland and is considering connecting over Toronto, the time and inconvenience of obtaining a Canadian visa is a significant barrier. If Canada supports Canadian airports becoming international connection points and Canadian airlines becoming international network carriers—which is certainly our ambition—and Canadian businesses benefiting from increased trade opportunities, then Canada must recognize that the current visa framework stifles such opportunities and imposes a significant competitive disadvantage vis-à-vis other hubs, such as the UAE, Singapore, Amsterdam, and Panama City.
Finally, going back to my remarks on the bilateral air agreements, we urge you to continue to support the approach found in the blue sky policy. Many state-subsidized foreign airlines would love to have unmetered access to the Canadian hubs, and they would be able to point to short-term benefits in their arguments for further access. However, we have to recognize that this would damage Canadian air access in the long term, and that is a reality that Australia is now facing.
Merci. Thank you, Mr. Chairman.