Air Canada looks to low-cost market
Air Canada remains committed to entering the low-cost segment of the airline industry, either by starting its own low-cost carrier or through a partnership, according to the company’s chief executive.
"If we are to transform our company to make it truly sustainable on a long-term basis, profound changes have to occur to our business model," said Calin Rovinescu.
The carrier first disclosed its plans last year, saying it was targeting destinations in Europe, Mexico and the Caribbean.
A low-cost carrier will help the 75-year-old airline, which is Canada’s biggest, cut costs and make it more competitive with increasing numbers of low-cost carriers around the world, Rovinescu said at the airline’s annual meeting.
Airlines such as Air Canada that have been in existence for many years have cost structures that are 30 percent to 50 percent higher than those of low-cost airlines, Rovinescu said.
He said there are "three or four very successful models out there" that Air Canada is studying, including the possibility of launching a low-cost airline to fly to leisure destinations.
Air Canada was not intending to turn the entire airline into a low-cost carrier, Rovinescu said. A possible hangup cited by Reuters: Air Canada labor unions may oppose the move. But airline officials said they may try to bypass unions in their efforts.
By David Wilkening
David
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