Air Canada Rouge vice president commercial Vijay Bathija believes the leisure carrier’s performance since its launch in June 2013 shows its in-house model is working.

Carriers have experienced mixed fortunes with the airline-within-an-airline model, including Air Canada which launched and shelved its low-cost offshoot units a decade ago.

Air Canada’s fresh attempt through Rouge is aimed at better competing against aggressive discounters on lower-yields leisure routes, through a lower cost structure. Rouge’s fleet – comprised of older aircraft formerly operated by Air Canada – has since grown to 28 aircraft, including eight Boeing 767s and 20 Airbus A319s.

We have a simple target market - leisure," says Bathija. "There is no conflict with Air Canada. We have more focus on the leisure routes. Our model is working. It's very tailored to the market.”

While Rouge has picked up a number of former Air Canada routes, Bathija says the carrier’s model means it has been able to launch 13 routes not formerly operated by the group. In May it launches its first route to Asia, with flights from Vancouver to Osaka – another route not formerly served by Air Canada.

Bathija says with its summer network in place, it is now working towards its winter schedule. While using the group’s older aircraft means Rouge will benefit from lower fuel prices, Bathija says the airline will not be tempted to change its route selection course by the recent drop in oil prices. “The model is not dependent on it [lower fuel costs],” he says, noting route decisions will be driven by market demand and the carrier's ability of operate it efficiently. "We do what we think is right in the market."

Rouge plans to grow its fleet to 50 aircraft.

Source: Cirium Dashboard