New Canadian Discount Airline Launches This Summer

Air Canada’s sort of new discount airline, Rouge, will start flying in July. Unlike most other low-fare carriers, Rouge will operate both intercontinental and regional trips, starting with transatlantic flights from Toronto to Athens, Edinburgh, and Venice; Montreal to Athens; and Toronto to Costa Rica, Cuba, and the Dominican Republic.

I say “sort of” new airline because Rouge will still have close ties to Air Canada, including reservations and ticketing through the main Air Canada website, membership in Air Canada’s frequent-flyer program, coordinated schedules, and such.

Air Canada has converted enough planes to start the service this July—767s to Europe, A319s to the Caribbean—and it expects to increase service substantially as more planes become available. Service patterns will be seasonal, focusing on Europe in the summer and beach destinations in the winter, although some routes will probably operate year round. Also, the airline will focus on selling air-and-hotel packages, especially to warm beach destinations.

The main point of a new low-fare airline is, obviously, low fares. That’s the way it’s supposed to be. But the Air Canada PR folks couldn’t resist trying to put lipstick on a pig by, in the words of a press release, claiming the airline will be “focusing on customer service excellence through customized training and stylishly relaxed onboard apparel, both of which will contribute to a fresh, comfortable and vacation like environment for travellers.”

Really? The flight crew’s apparel makes the seats more comfortable? Crew training makes a flight “vacation-like”? Give us a break, Air Canada. Skip the over-the-top PR and concentrate on running a decent airline.

Clearly, fares levels are not below competition. From Toronto to Athens in August, for example, Rouge offers the only nonstops available, at an economy fare of $1,428 CAD (currently about $1,380); Expedia posts these fares. The booking site also shows slightly lower fares on other airlines, but only on one-stop and two-stop connecting itineraries.

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Many travelers might well prefer Rouge to competitors because of the nonstop flights, not necessarily the prices. It remains to be seen if competitive airlines will allow Rouge any price advantages where they fly head-to-head.

Overall, the base economy product on Rouge will be a bit below regular economy on major airlines, with tighter seating, down to a claustrophobic 30 inches on 767s and a knee-crunching 29 inches on 319s. Yes, you know enough to expect Spartan conditions on a low-fare airline, and Rouge will certainly meet your expectations.

Rouge will also offer a premium-economy option on 767s to Europe. As far as I can tell, it’s a true premium economy, with wider seats and lots more legroom than regular economy; this is comparable with competitive services on Air France and British Airways. The round-trip premium-economy fare from Toronto to Athens in August is $2,252 CAD, par for the course at about 60 percent more than regular economy.

This isn’t Air Canada’s first go at an in-house low-fare affiliate; several previous attempts didn’t succeed. But Air Canada is doubtless feeling competitive pressures from the country’s two big independent low-fare airlines, Sunwing and WestJet, as well as from several European vacation airlines that serve Canada. Apparently, Air Canada decided Rouge was the best way to compete.

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(Photo: Air Canada)