Air Canada expanding Rouge fleet in ultra low-cost competition
Air Canada will begin deploying its low-cost Rouge airplanes on routes to British Columbia this summer, part of a strategic response as it braces for competition from new ultralow cost carriers.
The airline said on Monday that it will expand its Rouge narrow-body Airbus fleet in the second quarter, introducing new routes from Montreal to Victoria and Toronto to Nanaimo and Kamloops, B.C., beginning in June — the same month that WestJet Airlines Ltd. plans on launching its new ultra-low-cost carrier Swoop.
“We are equipping ourselves with additional tools, such as our new suite of economy fares and increased access to Rouge, to face our competitors headon and compete more effectively, including (against) the new low-cost entrants,” chief executive Calin Rovinescu said on a conference call with analysts Monday following the release of the company’s first quarter results. “With these and other initiatives, I expect we will build on the strengths of our first quarter results.”
While WestJet prepares to launch Swoop on June 20 in response to other ULCC competitors such as Flair Airlines Ltd., Air Canada has maintained its focus on targeting the premium passenger. When it comes to the new and emerging ULCCS, Air Canada has opted to monitor the market, deploying Rouge and offering a basic, no-frills fare to domestic customers when necessary.
Earlier this month, the airline introduced rebranded economy fares that it said would offer customers greater flexibility when it came to travelling amenities. One of those five fares is basic economy, a restrictive, no-frills category that Air Canada said could also be used in response to ULCCs.
“It’s all there ready in case we need to use that fare specifically or surgically in certain domestic markets,” Air Canada’s president of passenger airlines Benjamin Smith said Monday. “We’re definitely not putting that fare into the market across the board. We will use it when and where necessary. The percentage of seats (that are basic fare) will be determined by what we need competitively.”
Air Canada also said it is prepared to increase capacity in the event that WestJet pilots go on strike.