Air Canada's losses have led management to turn the carrier into a predominantly low-cost operator. Air Canada reported an operating loss of C$160 million ($102 million) for its first quarter ended 31 March, compared to C$293 million a year earlier. Chief executive Robert Milton told analysts last week that the airline will now follow the low-cost carrier model, with no-frills subsidiaries Tango and Zip set to take over much of Air Canada's domestic services, and Air Canada to become a mainly long-haul international carrier. Milton says: "If the [traditional mainline] model is broken, and there are mature carriers that can never be consistently profitable, while there is another group like Southwest Airlines, WestJet and Ryanair, that is, then we're kidding ourselves if we don't look to adapt and, frankly, mimic."

Source: Flight International