Air Canada and ITA Airways Forge Enhanced Connectivity Through New Codeshare Agreement

Air Canada and ITA Airways have announced a significant expansion of their partnership through a new codeshare agreement, effective for travel starting July 21, 2025. This agreement enhances connectivity between Canada and Italy, allowing each airline to place its flight code on 10 routes beyond their respective hubs in Toronto and Rome. The partnership unlocks over 30 one-stop itineraries with seamless connections, benefiting both leisure and business travelers. This development marks a critical milestone as ITA Airways prepares to join the Star Alliance in early 2026, aligning with broader industry trends favoring airline alliances for global network expansion.

Background: Evolution of Airline Partnerships

Air Canada, a founding member of the Star Alliance, has long leveraged strategic partnerships to expand its global footprint. As part of the world’s largest airline alliance, it benefits from shared services, coordinated schedules, and joint marketing with 25 other members. The alliance, established in 1997, is designed to offer passengers seamless travel experiences across different carriers while maximizing route coverage and operational efficiency.

ITA Airways, Italy’s national airline, was established in October 2021 following the collapse of Alitalia. Formed with the intention of creating a leaner, more competitive airline, ITA operates an all-Airbus fleet and has focused on profitable routes while avoiding the financial pitfalls of its predecessor. The European Commission confirmed that ITA was not the economic successor to Alitalia, allowing it to operate independently of previous liabilities.

In 2025, Lufthansa Group acquired a 41% stake in ITA Airways, further positioning the airline for integration into the Star Alliance. This move aligns ITA with a broader network of European and international carriers, enhancing its competitiveness and global reach. The codeshare agreement with Air Canada is a key step in this strategic evolution.

Key Features of the Codeshare Agreement

Expanded Route Access

The codeshare agreement enables Air Canada to place its “AC” flight code on ITA-operated flights from Rome to five Italian cities, Lamezia Terme, Palermo, Catania, Florence, and Bari, as well as to Cairo, Tunis, Algiers, Tirana, and Tel Aviv. Notably, services to Tunis and Algiers are pending final government approvals. These routes significantly enhance Air Canada’s reach into Southern Europe, North Africa, and the Middle East.

Conversely, ITA Airways will place its “AZ” code on Air Canada flights from Toronto to six Canadian destinations, Montreal, Ottawa, Vancouver, Edmonton, Calgary, and St. John’s, and four U.S. cities: Boston, Orlando, Dallas, and Fort Lauderdale. This provides ITA customers with expanded access to North America via Toronto, a major international hub.

Overall, the agreement unlocks over 30 one-stop itineraries, offering travelers more options and smoother connections. It also reflects a growing trend in the airline industry to use codeshares as a cost-effective means of network expansion without the need for additional aircraft or staff deployment.

“This agreement is a great step forward in our strategy to grow in a key market like North America,” said Joerg Eberhart, CEO of ITA Airways. “It enhances connectivity for both business and leisure travelers and supports the global promotion of Made in Italy.”

Timeline and Implementation

Tickets for the codeshare routes went on sale starting July 14, 2025, with travel commencing on July 21. The timing aligns with peak summer travel demand, particularly between North America and Europe. The airlines have also announced plans to integrate their frequent flyer programs, allowing Aeroplan and ITA Miles members to earn and redeem miles across both networks by early 2026.

This integration will coincide with ITA Airways’ formal entry into the Star Alliance. The codeshare agreement thus serves as both a commercial and symbolic bridge to full alliance membership, ensuring that ITA customers can benefit from Star Alliance privileges such as priority boarding, lounge access, and baggage handling.

Additionally, Air Canada’s partnership with Trenitalia extends the reach of this agreement beyond airports. Passengers can book seamless air-rail journeys to over 30 cities across Italy, further enhancing the value proposition of the codeshare for both leisure and business travelers.

Strategic Importance for Both Airlines

Air Canada’s Network Expansion

Air Canada operates up to 39 weekly flights to Italy during the summer 2025 season, offering over 13,000 weekly seats. This includes direct flights from Toronto and Montreal to Rome, Milan, Venice, and Naples. The Montreal-Naples route, launched in May 2025, reflects growing demand for leisure travel to Southern Italy.

The codeshare with ITA Airways allows Air Canada to offer more comprehensive coverage of the Italian market, including secondary cities that are not served by its own aircraft. This not only improves customer convenience but also strengthens Air Canada’s competitive position against other transatlantic carriers.

From a strategic standpoint, the agreement enhances Air Canada’s ability to capture market share among the large Italian diaspora in Canada, particularly in Ontario and Quebec. It also supports its broader ambition to serve as a gateway between North America and Europe.

ITA Airways’ North American Access

For ITA Airways, access to Air Canada’s North American network is a critical growth lever. The U.S. and Canada represent significant inbound tourism and business travel markets for Italy. Through the codeshare, ITA can now offer its customers convenient connections to key cities across Canada and the U.S.

This is particularly important as ITA prepares for deeper integration into the Lufthansa Group and Star Alliance. The codeshare with Air Canada complements existing partnerships with Lufthansa, SWISS, and Austrian Airlines, enabling ITA to offer a truly global network to its customers.

Moreover, the agreement supports ITA’s longer-term goal of financial sustainability. After years of operating at a loss, the airline is focusing on profitable growth through strategic alliances rather than rapid fleet or route expansion.

Industry Context and Financial Implications

Post-Pandemic Recovery

The global airline industry is in the midst of a post-pandemic recovery, with transatlantic travel leading the rebound. According to Statistics Canada, overseas travel by Canadians increased by 31.8% year-over-year in Q3 2024, with Italy among the top destinations. This recovery has created favorable conditions for new routes and partnerships.

Air Canada reported record revenues of CAD $22.3 billion in 2024, despite a Q4 net loss of CAD $644 million due to a one-time pension-related charge. These figures highlight the airline’s resilience and capacity for long-term investment in strategic partnerships.

Meanwhile, ITA Airways narrowed its 2023 loss to €5 million, a significant improvement over previous years. The codeshare with Air Canada, along with its integration into the Lufthansa Group, is expected to further stabilize its financial position.

Competitive Landscape

The codeshare agreement positions both airlines to better compete with transatlantic rivals such as Delta, United, and American Airlines, all of which have extensive partnerships and joint ventures. By leveraging each other’s networks, Air Canada and ITA can offer comparable connectivity and service levels.

For ITA, the partnership also serves as a counterbalance to low-cost carriers operating in the Italian market, such as Ryanair and Wizz Air. These airlines dominate short-haul routes but lack the long-haul connectivity and premium services that ITA can now offer through its alliance with Air Canada.

From a regulatory perspective, the agreement has passed necessary antitrust reviews, including EU approval of Lufthansa’s stake in ITA. This ensures compliance with competition laws while enabling the airlines to pursue deeper integration.

Conclusion and Future Outlook

The new codeshare agreement between Air Canada and ITA Airways represents a significant step forward in global airline collaboration. It enhances connectivity between two major markets, supports alliance integration, and provides tangible benefits for travelers. Both airlines stand to gain commercially and strategically from this partnership.

Looking ahead, the success of this agreement will depend on continued regulatory support, effective integration of loyalty programs, and the broader performance of the global travel industry. As ITA joins Star Alliance in 2026, further synergies are expected, including coordinated pricing, scheduling, and customer service enhancements.

FAQ

What is a codeshare agreement?
A codeshare agreement allows one airline to place its flight number on a flight operated by another airline, enabling both to sell seats on the same flight and offer more destinations without additional aircraft.

When does the Air Canada-ITA Airways codeshare take effect?
The agreement takes effect for travel starting July 21, 2025, with tickets available from July 14, 2025.

Will frequent flyer programs be integrated?
Yes, reciprocal loyalty benefits are expected by early 2026, aligning with ITA Airways’ entry into the Star Alliance.

Sources

TravelRadar, Air Canada, ITA Airways, Statistics Canada, FlightGlobal, Star Alliance