A plan by Air Canada to start airlines in the low-cost, leisure and cargo sectors is intended to make the airline competitive in the marketplace and is not a move to reduce employment costs, according to the carrier's president Robert Milton.

Plans for the start-ups, which the pilots' union oppose, are contained in documents submitted during current contract negotiations with Air Canada pilots, who have been flying without contracts since the beginning of April.

The airline has already announced its intention to start a low-cost carrier as part of its restructuring after its takeover of Canadian Airlines. No firm dates have been announced for any of the start-ups. Air Canada says the cargo and leisure ventures are more long term, while the low-cost carrier will begin operations this year.

Speaking at a transport conference in Toronto on 12 June, Milton said the start-ups were about expanding the airline and not to do with reducing wage costs.

As part of the government- imposed conditions of its takeover of Canadian, Air Canada's low-cost carrier is banned from flying in the east of the country if another discount carrier emerges. With CanJet of Halifax planning to begin a discount airline, Air Canada's new operation would appear to be limited to flying in Western Canada and trans-border routes in the east.

Source: Flight International