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India Extends Aircraft Leasing Tax Holiday to Boost Aviation Hub Status

India plans to extend the tax holiday for aircraft leasing in GIFT City to 15 years, enhancing its competitiveness and legal reforms to support global leasing growth.

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India Targets Global Aviation Hub Status with Extended Tax Incentives

India is reportedly preparing to significantly enhance its fiscal appeal to the global Aviation finance sector. According to recent reports, the government plans to extend the tax holiday for Commercial-Aircraft leasing companies operating in the Gujarat International Finance Tec-City (GIFT City) from the current 10 years to 15 years. This strategic move is designed to position India as a formidable competitor to established leasing hubs like Ireland, which currently dominates the market.

The proposal, expected to be part of the Union Budget announcements in February 2026, aims to capture a larger share of the $187 billion global aircraft leasing market. By aligning tax incentives with the economic lifecycle of aviation assets, India seeks to encourage lessors to domicile their operations within the country long-term, rather than relying on offshore jurisdictions. This initiative represents a concerted effort to retain capital within the Indian economy and support the nation’s status as the world’s third-largest aviation market.

Currently, Indian carriers lease a vast majority of their fleets from entities based in Ireland or other tax-efficient locations. The proposed changes acknowledge that for India to become a self-reliant aviation hub, it must offer a fiscal and regulatory environment that rivals or exceeds global benchmarks. The extension of the tax holiday is seen as a critical step in addressing the specific profitability structures inherent to the aircraft leasing business model.

Aligning Fiscal Policy with Asset Lifecycles

The core rationale behind the proposed 15-year tax holiday lies in the unique financial structure of aircraft leasing. In the initial years of a lease, companies often incur high depreciation costs and interest expenses, which can result in lower taxable profits or even losses. Profitability typically peaks in the later years of an asset’s life, often between years 10 and 15, as depreciation charges decrease. Under the current regime, which offers a 100% exemption for 10 years within a 15-year block, lessors risk exhausting their tax benefits during low-profit years, leaving the highly profitable “tail” of the lease subject to taxation.

By extending the holiday to a flat 15 years, the government ensures that the most lucrative period of the lease remains tax-free. This adjustment is designed to make GIFT City a more attractive jurisdiction for high-value aviation assets compared to Ireland, which levies a standard corporate tax rate of 12.5%. For lessors, the difference between a 12.5% tax on peak profits and a 0% tax rate in India could be a deciding factor in where to domicile new special purpose vehicles (SPVs).

Industry experts suggest that this move corrects a structural mismatch in the previous policy. A source familiar with the matter noted that expanding the benefit covers the period when lessors typically realize the bulk of their profit, thereby incentivizing the migration of “sale-and-leaseback” transactions from Dublin to Gandhinagar.

“Expanding this benefit by five years will make GIFT City more attractive to lessors who typically make the bulk of the profit on an aircraft in the latter years when there’s little or no depreciation charge.”

Regulatory Reforms Strengthening Investor Confidence

Fiscal incentives are being supported by substantial legislative reforms aimed at reducing risk for international investors. In April 2025, the Indian Parliament passed the Protection of Interests in Aircraft Objects Bill, aligning national laws with the international Cape Town Convention. This legislation is pivotal as it ensures that lessors can swiftly repossess aircraft in the event of an Airlines default, addressing a long-standing concern regarding “country risk” in India.

Prior to this legislation, the difficulty of repossessing assets made foreign lessors hesitant to lease to Indian carriers without charging high risk premiums. The new legal framework is expected to reduce leasing costs for Indian airlines by approximately 8–10% by lowering these risk premiums. This legal safety net, combined with the proposed tax extensions, creates a comprehensive ecosystem that addresses the two primary barriers to entry: tax inefficiency and asset security.

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Furthermore, the International Financial Services Centres Authority (IFSCA) amended its framework in February 2025 to allow GIFT City lessors to acquire assets from Indian Manufacturers and execute sale-and-leaseback (SLB) transactions with Indian residents. This regulatory change enables domestic giants like Air India and IndiGo to sell new aircraft to a GIFT City lessor and lease them back, keeping the entire financing ecosystem within India’s borders.

Competitive Landscape and Market Adoption

The global aircraft leasing market is currently heavily concentrated, with Ireland managing approximately 50-60% of the world’s leased aircraft. Ireland’s dominance is built on a stable legal regime, a vast network of Double Taxation Avoidance Agreements (DTAAs), and a deep pool of aviation finance expertise. India’s strategy relies on leveraging its massive domestic demand, the third largest in the world, to shift the center of gravity. By offering a 0% tax rate versus Ireland’s 12.5%, India presents a compelling financial case for lessors focused on the Indian market.

Early adoption indicates that the strategy is gaining traction. Major domestic carriers have already established leasing units in GIFT City, including Air India (via AI Fleet Services IFSC Ltd) and IndiGo (via InterGlobe Aviation Financial Services IFSC Pvt). Additionally, global players such as subsidiaries of Rolls-Royce and Willis Lease Finance have established a presence. New entrants like Akasa Air are also reportedly applying for approvals to set up leasing entities, signaling broad industry interest.

Despite these advancements, challenges remain in building a comparable ecosystem of professional services, including legal, technical, and accounting expertise, which Dublin has cultivated over decades. However, the combination of the Cape Town Convention alignment and the extended tax holiday signals a long-term commitment from the Indian government to overcome these hurdles and localize the economic benefits of its booming aviation sector.

Concluding Section

The proposal to extend the tax holiday to 15 years represents a mature understanding of the aviation finance business model. If passed in the February 2026 budget, it will likely serve as a catalyst for shifting significant leasing volume to India. By systematically removing barriers related to taxation and asset repossession, India is laying the groundwork to retain billions of dollars in financial services revenue that currently flows overseas.

Looking ahead, the success of GIFT City as a global leasing hub will depend on the consistent implementation of these policies and the continued growth of the domestic aviation market. As Indian carriers continue to place record-breaking aircraft Orders, the ability to finance and lease these assets domestically could fundamentally alter the economics of the Indian aviation industry.

FAQ

Question: What is the proposed change to the tax holiday for aircraft leasing in GIFT City?
Answer: The government plans to extend the tax holiday on profits earned by aircraft leasing firms from the current 10 years to 15 years. This is expected to be announced in the February 2026 Union Budget.

Question: Why is the 15-year timeframe significant for aircraft leasing?
Answer: Aircraft leasing profits often peak in the later years of a lease (years 10–15) as depreciation costs drop. A 15-year holiday ensures that these high-profit years are tax-exempt, whereas a 10-year holiday might expire before peak profitability is reached.

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Question: How does India’s proposed tax rate compare to Ireland’s?
Answer: India offers a 100% tax exemption (0% tax rate) for the duration of the holiday in GIFT City. In contrast, Ireland, the current global hub for aircraft leasing, has a standard corporate tax rate of 12.5%.

Question: What recent legal reforms support this tax incentive?
Answer: In April 2025, India passed the Protection of Interests in Aircraft Objects Bill, aligning with the Cape Town Convention to ease aircraft repossession. Additionally, IFSCA reforms in February 2025 allowed for broader sale-and-leaseback transactions with Indian entities.

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Photo Credit: Air India

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King Salman International Airport Set to Boost Saudi Aviation Capacity

King Salman International Airport in Riyadh will handle up to 185 million passengers by 2050, driving aviation growth and sustainability.

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King Salman International Airport: A New Global Aviation Hub

The landscape of global aviation is poised for a significant transformation with the development of the King Salman International Airport (KSIA) in Riyadh. Announced by the Crown Prince Mohammed bin Salman, this mega-infrastructure project represents a cornerstone of Saudi Arabia’s Vision 2030. The initiative is not merely an expansion of existing facilities but a complete reimagining of the capital’s role in international logistics and tourism. By utilizing the current King Khalid International Airport as a foundation, the project aims to create a gateway that bridges the East and West.

Covering an expansive area of approximately 57 square kilometers, the master plan outlines a facility that rivals the world’s largest aviation hubs. The project is being developed by the King Salman International Airport Development Company (KSIADC), a subsidiary of the Public Investment Fund (PIF). This development underscores the Kingdom’s strategic shift toward diversifying its economy, moving away from a reliance on oil and toward becoming a global powerhouse in trade, transport, and tourism.

The significance of KSIA extends beyond its physical footprint. It is designed to serve as a catalyst for Riyadh’s growth, supporting the city’s ambition to join the ranks of the world’s top ten city economies. With a strategic location that places it within a four-hour flight of 40% of the world’s population, the airport is positioned to capture a substantial share of international transit traffic while serving the growing domestic demand.

Infrastructure and Economic Impact

The scale of the King Salman International Airport is difficult to overstate. The master plan includes the construction of six parallel runways, a feature that will allow for high-volume operations and seamless traffic management. The capacity targets set for the project are ambitious: the airport aims to handle 120 million passengers annually by 2030. Looking further ahead, the target increases to 185 million passengers by 2050. If achieved, these figures would place KSIA among the busiest airports globally, comparable to current leaders like Hartsfield-Jackson Atlanta International.

Beyond passenger numbers, the airport is engineered to become a heavyweight in global logistics. The infrastructure is designed to process 3.5 million tons of cargo annually by 2050. This capability is essential for Riyadh’s transformation into a logistics hub, facilitating the rapid movement of goods between continents. The development is expected to contribute approximately SAR 27 billion ($7.2 billion) annually to Saudi Arabia’s non-oil GDP, marking a substantial return on investment for the national economy.

The project is also a major engine for employment. Official projections indicate that the airport ecosystem will create 103,000 direct and indirect jobs. These roles will span various sectors, including aviation operations, retail, hospitality, and logistics management. To support this workforce and the operational complexity of six runways, the region will see a surge in demand for specialized training and aviation expertise, further integrating the local workforce into the global aviation industry.

The 2050 target of 185 million passengers signals an intent to not just compete, but to redefine the scale of global aviation hubs.

Design, Sustainability, and the Aerotropolis Concept

The architectural vision for KSIA, led by the renowned firm Foster + Partners, moves away from traditional airport designs to embrace the concept of an “aerotropolis”, a city within a city. This approach integrates the airport terminal with the urban fabric of Riyadh. The master plan allocates 12 square kilometers specifically for residential, recreational, and retail facilities. This includes high-end shopping, dining, and housing for airport staff, creating a self-sustaining ecosystem that operates independently of the main city center.

A defining feature of the passenger experience will be the “Wadi Loop.” Inspired by Saudi Arabia’s natural river valleys, this central green corridor will serve as a landscaped connector between terminals and commercial zones. The design prioritizes natural light and ventilation, aiming to humanize the travel experience by bringing elements of nature indoors. This focus on biophilic design is intended to reduce the stress typically associated with large transit hubs, offering a unique environment that reflects the local culture and geography.

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Sustainability is a non-negotiable pillar of the project. The developers have committed to achieving LEED Platinum certification, the highest standard for green building rating systems. The airport plans to power its operations entirely through renewable energy sources. This commitment aligns with the broader “Saudi Green Initiative,” ensuring that the massive expansion in infrastructure does not come at the cost of environmental degradation. By utilizing cutting-edge energy efficiency technologies, KSIA aims to set a new benchmark for eco-friendly aviation infrastructure.

Strategic Operations and Future Timeline

The operational success of King Salman International Airport is closely tied to the growth of the Kingdom’s airlines. The airport will serve as the operational base for the existing national carrier, Saudia, and the newly established Riyadh Air. Owned by the PIF, Riyadh Air is scheduled to launch commercial flights in 2025 and aims to connect to 100 destinations by 2030. The synergy between the new infrastructure and the new airline is critical, as Riyadh Air is expected to drive the transfer traffic necessary to fill the expanded capacity.

Construction is currently underway, with a phased timeline designed to meet specific milestones. Following the launch of Riyadh Air, a new private aviation terminal is expected to open in 2026, catering to high-net-worth individuals and business delegations. A new runway is slated for completion by 2027, followed by a major terminal building between 2028 and 2029. The ultimate goal is full operational readiness of the main iconic terminal by 2030, just in time to support the influx of visitors for the Riyadh Expo 2030.

We observe that this project places Riyadh in direct competition with established regional hubs like Dubai and Doha. However, the strategy appears to differ by focusing heavily on destination traffic driven by Saudi Arabia’s burgeoning tourism sector, in addition to transit passengers. With delivery partners like Mace and master planners like Jacobs involved, the project leverages global expertise to navigate the technical complexities of airspace management and large-scale construction.

Concluding Section

King Salman International Airport represents a pivotal moment in the history of Saudi aviation. By combining massive scale with a focus on sustainability and passenger experience, the project aims to redefine what a modern airport can be. It serves as a tangible manifestation of Vision 2030, illustrating the Kingdom’s commitment to diversifying its economy and opening its doors to the world.

As construction progresses toward the 2030 deadline, the airport will likely become a case study in mega-project execution. If the targets for passenger capacity and economic contribution are met, KSIA will not only transform Riyadh’s skyline but also alter the flow of global air travel, firmly establishing Saudi Arabia as a central node in the international logistics network.

FAQ

Where is King Salman International Airport located?
The airport is located in Riyadh, Saudi Arabia. It is being developed on the site of the existing King Khalid International Airport, expanding the footprint to approximately 57 square kilometers.

When will the airport be fully operational?
While the project is being delivered in phases, the main iconic terminal is targeted for full operational readiness by 2030. Initial milestones include the launch of Riyadh Air in 2025 and a private aviation terminal in 2026.

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What is the projected passenger capacity?
The master plan targets a capacity of 120 million passengers per year by 2030, rising to 185 million passengers per year by 2050.

Who is designing the airport?
The master plan was designed by the UK-based architectural firm Foster + Partners, who won the competition to design the facility.

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Photo Credit: PIF

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YYC Calgary Airport Reopens West Runway After Major $201M Upgrade

Calgary Airport Authority completes $201M rebuild of West Runway with CAT II upgrade and sustainability measures for future growth.

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A New Era for YYC: The West Runway Returns

On November 27, 2025, The Calgary Airport Authority marked a significant milestone in Canadian aviation infrastructure with the official reopening of the West Runway (Runway 17R-35L). This event concludes a comprehensive two-year rehabilitation project that required a substantial investment of approximately $201 million. As the longest runway at YYC Calgary International Airport, measuring 12,500 feet, this asset is critical to the region’s connectivity. The project was not simply a resurfacing effort but a complete structural rebuild designed to modernize the airport’s capabilities for decades to come.

The reopening comes at a pivotal moment for the airport, which serves as a major economic engine for Calgary and the province of Alberta. With commercial flights scheduled to resume landing on the runway on Friday, November 28, 2025, and full operational capacity expected by December 2, 2025, the timing aligns with projected surges in passenger traffic. We see this development as a strategic move to bolster the airport’s operational resilience, ensuring it can handle the demands of modern aviation while adhering to strict environmental standards.

Funding for this massive undertaking was a collaborative effort between the federal government and the airport authority. The Government of Canada, through Transport Canada’s Airport Critical Infrastructure Program, contributed $57.5 million, recognizing the runway’s importance to the national supply chain and travel network. The remaining $143.5 million was funded directly by The Calgary Airport Authority. This financial commitment underscores the long-term vision for YYC, positioning it to support both passenger growth and critical cargo movements efficiently.

Engineering a Complete Lifecycle Replacement

The scope of the West Runway Rehabilitation Project extended far beyond standard maintenance. Originally constructed in 1939, the runway required a complete lifecycle replacement to meet the demands of heavier, modern aircraft and increased traffic frequency. PCL Construction, serving as the general contractor, led the effort to remove and replace the entire pavement structure. This foundational work ensures that the runway will remain operational and safe for another 40 years, effectively resetting the clock on one of the airport’s most vital assets.

In addition to the pavement overhaul, the project included significant upgrades to the runway’s electrical and lighting systems. The installation of energy-efficient LED lighting replaces the outdated incandescent fixtures, providing superior visibility for pilots while reducing energy consumption. Furthermore, the project addressed subsurface infrastructure, replacing drainage and storm systems to improve climate resilience. These improvements are essential for maintaining operations during severe weather events, which are not uncommon in the region.

We also note the inclusion of critical safety enhancements that bring the runway in line with modern international standards. The rehabilitation included the addition of Runway End Safety Areas (RESA), which provide an extra margin of safety for aircraft. These structural and technological upgrades represent a holistic approach to infrastructure management, prioritizing both current operational needs and future safety requirements.

“This is critical infrastructure… We forecast that our passenger volumes could increase up to 40 per cent within the next five years. Everything we build now is made to meet that moment, to elevate passenger experience, and to make our operations more efficient and sustainable.”, Chris Dinsdale, President & CEO, The Calgary Airport Authority.

Operational Efficiency and Safety Upgrades

One of the most significant operational improvements resulting from this project is the upgrade to a Category 2 (CAT II) runway status. This certification allows for aircraft landings in lower visibility conditions, such as dense fog, which has historically been a challenge for flight schedules. By enabling landings in poorer weather, the airport can significantly reduce the number of flight diversions and delays. This upgrade directly translates to a more reliable schedule for passengers and airlines alike, minimizing the ripple effects of weather-related disruptions.

The return of the West Runway also restores the airport’s ability to balance air traffic effectively between its parallel runways. For the past two years, the airport has operated with reduced capacity, often leading to longer taxi times and increased pressure on the East Runway. With the West Runway back online, passengers landing on the west side of the airfield can expect to save approximately five minutes in taxi time per flight. This efficiency gain, while seemingly small on an individual level, aggregates to substantial time and fuel savings across thousands of annual flights.

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Furthermore, the reopening facilitates necessary maintenance on other parts of the airfield. With the West Runway fully operational, the airport gains the flexibility to conduct routine upkeep on the East Runway without severely impacting overall capacity. This redundancy is vital for a major international hub, ensuring that maintenance schedules do not interfere with the airport’s primary mandate of moving people and goods safely and efficiently.

“Safety and security is always No. 1… The reopening of the runway represents an investment in growth. In 2024, we had 18 million passengers, [and] in 2025, we’re going to have another record.”, Chris Miles, Chief Operating Officer, The Calgary Airport Authority.

Setting a New Standard for Sustainability

The West Runway project distinguishes itself through its rigorous commitment to environmental stewardship. It is one of the first airport projects in Canada to pursue and achieve certification under the Envision Framework, with a Gold level certification anticipated from the Institute for Sustainable Infrastructure. This framework evaluates the sustainability and resilience of civil infrastructure, and YYC’s adherence to these standards sets a precedent for future aviation projects across the country.

A key component of this sustainability strategy was the aggressive recycling of construction materials. We understand that approximately 90% of the materials from the old runway, including asphalt, concrete, and electrical fixtures, were recycled or reused on-site. This approach significantly reduced the volume of waste sent to landfills and minimized the carbon footprint associated with transporting new materials to the construction site. Additionally, the project utilized CarbonCure technology, which injects captured carbon dioxide into fresh concrete, permanently sequestering it and reducing the overall embodied carbon of the new pavement.

Water conservation also played a major role during the construction phase. The project team implemented a water re-use program that saved nearly 2 million liters of potable water. In a region where water resource management is increasingly important, such measures demonstrate a responsible approach to large-scale construction. These initiatives reflect a broader shift in the aviation industry toward balancing necessary infrastructure growth with environmental responsibility.

Conclusion

The reopening of the West Runway at YYC Calgary International Airport marks the successful conclusion of a complex, high-stakes infrastructure project. By investing $201 million into a complete rebuild, the airport has secured its operational capacity for the next four decades. The integration of advanced safety features, such as the CAT II upgrade, alongside industry-leading sustainability practices, positions YYC as a forward-thinking leader in the aviation sector. As passenger volumes are projected to rise by 40% over the next five years, this infrastructure is not merely a replacement of the old but a foundation for future growth.

Looking ahead, the benefits of this project will be felt immediately by travelers through reduced delays and shorter taxi times. However, the long-term value lies in the airport’s enhanced resilience against climate challenges and economic shifts. As Calgary continues to expand as a global hub, the modernized West Runway stands as a testament to the importance of proactive investment in critical infrastructure.

FAQ

When will the West Runway be fully operational?
Commercial flights are scheduled to resume landing on the runway on Friday, November 28, 2025. The runway is expected to reach full operational capacity by December 2, 2025.

What was the total cost of the rehabilitation project?
The total cost of the project was approximately $201 million CAD. This was funded by a combination of $57.5 million from the Government of Canada and $143.5 million from The Calgary Airport Authority.

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How does this project improve the passenger experience?
The project improves experience by upgrading the runway to Category 2 status, which allows for landings in lower visibility, reducing diversions and delays. Additionally, utilizing the West Runway can reduce taxi times by approximately five minutes for flights landing on that side of the airport.

What makes this project sustainable?
The project is Envision Framework certified. It achieved this by recycling approximately 90% of materials from the old runway, using CarbonCure technology to sequester CO2 in the concrete, and implementing a water re-use program that saved nearly 2 million liters of water.

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YYC Calgary International Airport

Photo Credit: YYC

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Air Canada Expands Transatlantic Routes for Summer 2026 Schedule

Air Canada adds new non-stop European routes for Summer 2026, boosting network to 35 transatlantic destinations and enhancing connectivity.

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Air Canada Expands Summer 2026 Schedule to Secure Market Position

Air Canada has officially announced a significant expansion of its international flight schedule for Summer 2026. This strategic move introduces new non-stop routes to Europe originating from major Canadian hubs including Montreal, Toronto, and Halifax. With these additions, the airline is poised to solidify its standing as the carrier offering the second-largest transatlantic network by destinations in North America, trailing only United Airlines. This expansion represents a calculated effort to capture a larger share of the international travel market by leveraging new aircraft technology and targeting specific, high-demand secondary markets.

The updated schedule is not merely a restoration of pre-pandemic capacity but marks an aggressive growth phase. By adding four new destinations and resuming a key route to the Middle East, Air Canada is optimizing its fleet utilization to serve cities that were previously difficult to access directly. The airline’s strategy relies heavily on the deployment of efficient, single-aisle aircraft, allowing for profitable operations on thinner routes that would be unsustainable with larger widebody jets. This approach aligns with broader industry trends where carriers are moving away from the traditional hub-and-spoke model for every destination, opting instead for point-to-point service where viable.

We observe that this expansion is designed to appeal to a diverse demographic, ranging from leisure travelers seeking direct access to European cultural centers to business travelers requiring efficient connections. The inclusion of Halifax in this expansion also highlights a commitment to strengthening Atlantic Canada’s connectivity to the European continent. As the airline prepares for the Summer 2026 season, the focus remains on operational efficiency and network breadth, ensuring that Canadian travelers and those connecting from the United States have extensive options for transatlantic travel.

New Routes and Strategic Connections

The centerpiece of this announcement involves the introduction of specific routes that cater to underserved markets. From Montreal (YUL), Air Canada will launch a three-times-weekly service to Berlin (BER), Germany. This route is particularly notable as it will be the only non-stop service between Montreal and the German capital, filling a void left by previous market exits. Additionally, Montreal will see a new connection to Nantes (NTE), France, operating three times weekly. This route serves as a gateway to the Loire Valley and complements the airline’s existing robust network in France, which already includes Paris, Lyon, Nice, and Toulouse.

Toronto (YYZ) and Halifax (YHZ) are also beneficiaries of this network expansion. Toronto will gain a three-times-weekly service to Ponta Delgada (PDL) in the Azores, Portugal. This route is strategically positioned to serve the large Portuguese diaspora in the Greater Toronto Area as well as leisure travelers seeking nature tourism. Meanwhile, Halifax will see the addition of a three-times-weekly flight to Brussels (BRU), Belgium. This establishes Brussels as Halifax’s second European destination alongside London Heathrow, significantly improving trade links and travel options for Atlantic Canadians who previously had to backtrack through Montreal or Toronto to reach the European mainland.

In addition to these new launches, Air Canada is resuming its seasonal service between Montreal and Tel Aviv (TLV). This route, which had been suspended due to regional conflict, is scheduled to operate twice weekly using the Boeing 787 Dreamliner. The resumption of this service indicates a cautious but optimistic approach to restoring connectivity to the region, providing a vital link for passengers traveling between Canada and Israel. The operational dates for these routes span from June and July through September and October 2026, covering the peak summer travel window.

“We are strategically increasing new non-stop routes across Europe to bring convenient access to key destinations, while strengthening economic ties, and supporting tourism. With these additions, Air Canada will offer North America’s second largest transatlantic network by destinations next summer.”, Mark Galardo, EVP & Chief Commercial Officer at Air Canada.

Fleet Innovation and the Narrowbody Strategy

A critical component of Air Canada’s Summer 2026 expansion is the specific aircraft selected to operate these routes. The Montreal to Berlin service will mark the debut of the Airbus A321XLR (Extra Long Range) in the airline’s transatlantic network. This aircraft is widely regarded as a game-changer in the aviation industry because it offers the range of a widebody jet with the economics of a single-aisle plane. By utilizing the A321XLR, we see that Air Canada can fly longer, thinner routes economically, opening up direct connections to cities that would not be profitable to serve with larger aircraft like the Boeing 777 or Airbus A330.

Similarly, the routes to Nantes, Ponta Delgada, and Brussels will utilize the Boeing 737 MAX 8. This aircraft choice underscores a shift toward serving “secondary” European markets efficiently. Rather than funneling all traffic through massive hubs like Frankfurt or London, the use of the 737 MAX 8 allows for non-stop point-to-point service. This strategy benefits passengers by reducing travel time and eliminating layovers, while allowing the airline to maintain high load factors on aircraft with lower seating capacities compared to widebody fleets.

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This fleet strategy also supports Air Canada’s “Sixth Freedom” objective, which aims to attract travelers from the United States who connect through Canadian hubs to reach international destinations. By offering unique direct routes that may not be available or convenient from every U.S. airport, Air Canada enhances its value proposition for cross-border travelers. The combination of the A321XLR and the 737 MAX 8 provides the operational flexibility required to compete aggressively with U.S. carriers while managing operating costs effectively.

Market Analysis and Competitive Landscape

The claim that Air Canada now holds the second-largest transatlantic network by destinations in North America is supported by industry data for the upcoming 2026 season. With the inclusion of these new routes, Air Canada will serve 35 transatlantic destinations. This places the carrier ahead of competitors such as Delta Air Lines and Air Transat, which trail with approximately 29 destinations each. United Airlines remains the leader in this segment with approximately 36 transatlantic destinations. This ranking is significant as it demonstrates Air Canada’s capability to punch above its weight class relative to the size of its domestic population, leveraging its geographic position to serve a global market.

It is important to view this announcement within the broader context of the airline’s total Summer 2026 scope. When combined with previously announced routes, such as new services from Montreal to Palma de Mallorca and Catania, and resumed services from Toronto to Shanghai and Budapest, Air Canada is scheduled to serve 126 global destinations. The total capacity is projected to reach up to 155,000 weekly seats. This volume of service reflects a complete recovery from pandemic-era reductions and a transition into a period of sustained network maturation.

The expansion also highlights the competitive dynamics of the transatlantic market. As European carriers also ramp up capacity, North American airlines are racing to secure slots and market share in key leisure and business destinations. By solidifying its presence in Germany, France, Portugal, and Belgium, Air Canada is diversifying its revenue streams and reducing reliance on any single market. The strategic focus on both major capitals like Berlin and regional hubs like Nantes ensures a balanced portfolio of destinations that appeals to a wide variety of traveler profiles.

Concluding Section

In summary, Air Canada’s Summer 2026 schedule represents a major step forward in the airline’s international growth strategy. By launching unique non-stop routes to Berlin, Nantes, Ponta Delgada, and Brussels, and by deploying efficient narrowbody aircraft like the Airbus A321XLR and Boeing 737 MAX 8, the carrier is effectively optimizing its network for both profitability and passenger convenience. The resumption of service to Tel Aviv further restores vital international links, contributing to a comprehensive global schedule.

Looking ahead, this expansion reinforces Air Canada’s position as a formidable competitor in the transatlantic market, firmly securing its status as the second-largest operator by destinations in North America. As the airline industry continues to evolve, the ability to serve secondary markets directly through advanced aircraft technology will likely remain a key differentiator. We can expect this trend of “long-haul narrowbody” flying to continue shaping future route maps, offering travelers more direct options and reshaping the traditional hub-and-spoke dynamics of international travel.

FAQ

Question: When do the new Summer 2026 flights begin operating?
Answer: The new routes have staggered start dates. Montreal to Tel Aviv resumes June 5; Montreal to Nantes begins June 10; Toronto to Ponta Delgada begins June 11; Halifax to Brussels begins June 18; and Montreal to Berlin begins July 2, 2026.

Question: What type of aircraft will fly the new Montreal to Berlin route?
Answer: The Montreal to Berlin route will be operated using the new Airbus A321XLR (Extra Long Range) aircraft.

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Question: Is Air Canada resuming flights to Israel?
Answer: Yes, Air Canada is resuming seasonal service between Montreal and Tel Aviv starting June 5, 2026, operating twice weekly with a Boeing 787 Dreamliner.

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Photo Credit: Air Canada

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