Air Canada considers setting up new low-cost carrier

Air Canada is drawing up a business plan to create a low-cost carrier (LCC) to fly to vacation spots in the Caribbean, according to Business Review Canada.

The publication said on Wednesday that other vacation spots will also include Europe and Mexico.

"This LCC would be in addition to Air Canada's major routes and its continuation is based upon its profitability in the competitive market," it said.

Air Canada already has Air Canada Vacations, which caters to middle and higher-end travellers to vacation spots.

"This LCC would fill the lower and middle-class leisure travelling needs," said Business Review Canada.

The leading business magazine also viewed the move as Air Canada's "latest strike in its fight against lower-cost rival companies such as Westjet Airlines Ltd and Air Transat whose growth has been eating into Air Canada's market shares in the vacation routes."

Currently, Air Transat and Sunwing Travel Group are the number one and two leaders in the Canadian tour operator market.

A tentative agreement was reached with the Air Canada Pilots Association (ACPA) as the fact sheet and new labour contract for Air Canada's LCC is being reviewed.

The ACPA will vote on the LCC between April 15 and 27, Business Review Canada said.

It said the LCC fleet will comprise 30 Airbus and 20 Boeing planes, with capacity of up to 213 passengers.

Business Review Canada also said the LCC would create 462 new pilot jobs, which would be automatically added to the ACPA.

Air Canada previously launched Tango and Zip, two other low-cost carriers, which failed after two years.

- CMC