Air Canada has delayed the launch of its discount airline, dubbed "Air Canada Lite" by the industry, and is concerned about the results of its earlier decision to merge several regional airlines into one unit.
This is the second delay for Air Canada Lite. The first came last summer when its pilots opposed the launch of a low-cost carrier. During tough negotiations on a new labour contract, Air Canada finally overcame those concerns, but not before it had pushed launch of the new carrier back to the end of 2000.
Now Air Canada has missed that deadline too, saying it will take-off sometime in the first half of this year. The airline has not explained this latest delay, but domestic traffic typically is slow during Canada's winter, and spring is a better time to launch an airline that is most likely to attract leisure travellers.
Under the terms imposed by Ottawa for Air Canada's take-over of Canadian Airlines, Air Canada cannot start a discount airline in eastern Canada before 30 September. The purpose of this is to give some breathing room to eastern start-ups like CanJet.
This means that if Air Canada Lite starts flying in the first half of this year, it will most likely be from a Vancouver base, where it can avoid that restriction, and use spare capacity at Canadian's large operations centre. It will compete directly against WestJet, the Calgary-based low-fare airline that has become a western Canada success story.
Air Canada is also reviewing the way it merged Air BC, Air Ontario, Air Nova and Canadian Regional Airlines. Joe Randell, president of the regional unit, is concerned by budget shortfalls, and is warning staff that the combined carrier is creating more infrastructure than it needs, "moving towards specialist roles" that lose the benefits from regionals "where we had generalists with many skills".
Source: Airline Business
