Air Canada launches Rouge.
TORONTO – Air Canada unveiled its new low-cost leisure airline, Rouge, Tuesday, with high hopes it will help restore its balance sheet to the black. But questions remained about how much Air Canada’s new subsidiary airline would add to Air Canada’s bottom line in the years ahead.
Ben Smith, Air Canada chief commercial officer, who led the team that developed Rouge, said his goal was to create a new airline geared toward leisure markets in Europe and the Caribbean with a more casual feel than the main line carrier.
“Right now, you’ll see we have a very professional, formal-type uniform at Air Canada, everything is done in a very professional business-type way, and that’s what our business-class customers are looking for,” Smith said. “Obviously, (Rouge) is still part of Air Canada as a wholly owned subsidiary. But it will have a more casual feel to it.”
When it launches in July, Rouge will fly routes primarily from Toronto to Athens, Venice and Edinburgh, as well as destinations in Cuba, Costa Rica, the Dominican Republic and Jamaica. It will also offer a twice weekly service between Montreal and Athens.
While Rouge will launch with two Boeing 767s and two Airbus 319s, it plans to expand to more than 50 aircraft in the next three to five years. This will allow Rouge to add destinations the main line cannot compete on because of its higher cost structure, including secondary markets in Europe.
Half of the cost savings will come from lower wages, benefits and different work rules for employees. The remainder will come from the high-density configuration of its planes and a multi-tier seating structure.