Whereas connecting passengers have to switch airport terminals in New York, which often involves a 30-minute taxi or shuttle ride, passengers meeting a connecting flight at Pearson International Airport in Toronto only have to walk from one airport gate to another.

"What we're requesting is some sort of equal advantage between competitors," Morais said. "We want the freedom to take traffic across the border, just like they do. Air Canada has developed what is almost a monopoly situation, and we think that's unfair."

When the bilateral air agreement expired, Israel informed Canada that it would permit Air Canada to fly to Israel only four times each week, instead of the seven times that had been permitted until Nov. 9, when the air agreement expired.

But Air Canada's winter schedule, based on seven weekly flights, is already heavily booked, according to spokesperson Laura Cook.

In response, Canada sent Israel a letter in which it indicated that, should Israel limit Air Canada's landing rights in Tel Aviv, Canada would withdraw permission for El Al to overfly Canadian airspace.

El Al officials were stunned by Canada's tactics.

"With a country that you're friends with, you don't do such things," Morais said. "You don't tell them that they can't travel through your air space. It's not done."

El Al operates 20 flights weekly into the United States, mostly into New York. All of these flights routinely overfly Canadian airspace, saving on fuel consumption and reducing flight time by 30 minutes.

Israeli Prime Minister Ehud Barak and Canadian Prime Minister Jean Chretien later agreed to maintain the status quo until their respective transportation ministers could meet to iron out the difficulties.