Air Canada will begin flying to European and Caribbean leisure destinations next year under the 'Rouge' name, the airline said on Tuesday, disclosing details about the new low-cost carrier it hopes will provide a springboard for sustained profitability.Air Canada is launching Rouge at a time when Canadians have a growing number of options for leisure travel. It will compete with Transat, WestJet Vacations and Sunwing Travel.Rouge will offer cheap flights to tourists visiting the Caribbean and Europe, starting July 1, 2013 - not June, as was previously announced.Tickets have gone on sale for flights to Venice, Italy; Edinburgh, Scotland; Athens, Greece; Cuba; the Dominican Republic; Jamaica and Costa Rica, Air Canada said in a statement.The fight for share of the leisure market has become more important for Air Canada as main rival WestJet prepares to launch Encore, its Canadian regional airline.Encore promises to undercut Air Canada fares on domestic short-haul flights.Rouge, which will fold Air Canada's existing holiday package business into the new low-cost operation, will initially fly four planes from Air Canada's mainline fleet.As Air Canada takes delivery of Boeing 787s, starting in 2014, it will funnel more planes into the Rouge operation. It said it planned to reach 50 aircraft in three to five years.Air Canada has reported a string of quarterly net losses in recent years, weighed down by non-operating items such as losses on foreign exchange and interest expenses.But the airline was profitable in the third quarter, boosted by a foreign exchange gain and higher operating income, as tight cost controls started to pay off.Rouge, operating as a wholly owned unit of Air Canada, will have its own management team, headed by Michael Friisdahl, former chief executive of Thomas Cook North America.Air Canada plans to hire 150 flight attendants and 50 pilots for Rouge and expects to generate profits by fitting its planes with more seats and paying lower wages.Earlier this year, Air Canada secured new union deals that included lower wages and less-generous pension plans for new hires after more than a year of turbulent negotiations.Air Canada chief financial officer Michael Rousseau has said the new carrier will not have a material impact on Air Canada's 2013 results. Source: Reuters
Gravity always wins!