Air Canada is ending dedicated freighter operations to China from July, and returning a leased MD-11 freighter to ACMI provider, World Airways, owing to overcapacity in the market.

The airline was operating service between Shanghai and Toronto. Air Canada Cargo president Claude Morin said declining yields forced the decision, noting that numerous trans-Pacific freighter flights have been launched in the last year.

US carriers, including UPS and Polar, have been stepping up services to Shanghai while Chinese carriers, Shanghai Airlines and Yangtze River Express, have also begun offering US flights.

Furthermore, Jade Air Cargo has been preparing to commence a B747-400ERF operation from its hub at Shenzhen via Shanghai to Vancouver and Houston in June.

Industry analysts say yields dropped as capacity increased. Air Canada had already reduced its freighter operations to China, also cutting frequencies to Shanghai's Pudong airport from five to three flights a week.

But the flag carrier Air Canada is continuing daily passenger service to Pudong, which will still deliver 90 tonnes of cargo a week.