Air Canada rouge Takes-on More Caribbean Flying in Summer 2014

Air Canada has announced that its leisure carrier subsidiary, Air Canada rouge, is expanding its network of Caribbean destinations this summer with routes previously operated by Air Canada from Toronto and Montreal to Cuba, Dominican Republic, Bahamas, Barbados, Haiti, Cancun and Tampa, FL being transferred to the new division this spring. This growth will be supported by the arrival of four additional aircraft into the Air Canada rouge fleet by July 2014 with the switch of services from the mainline operation taking place on a phased basis from March 2014 through to the end of May 2014 as additional aircraft are released by the mainline airline for operation by its leisure carrier.

Together with its previously announced 2014 summer schedule to Europe, Air Canada rouge plans to operate a total of 44 routes serving 28 popular vacation destinations, including continuation of its summer routes - Athens, Edinburgh and Venice - and new service to Barcelona, Dublin, Lisbon, Manchester, Nice and Rome.

The conversion of the additional Caribbean holiday destinations to Air Canada rouge represents a capacity increase of 22 per cent on these routes versus last year as the leisure carrier’s fleet is configured in a high density seating arrangement. The increase is greatest from Montreal where there will be in an increase of 36 per cent more seats on these routes and 20 per cent more flights than last summer with the introduction of additional flights to Cancun, Port-au-Prince and Punta Cana.

“Customer response to Air Canada rouge for vacation travel has been very positive since it started flying just last summer," said Ben Smith, executive vice president and chief commercial officer, Air Canada. "The addition of more year-round Caribbean destinations to Air Canada rouge's network is the next logical step as our leisure carrier enables us to compete on a more cost effective basis on these routes while leveraging the strength of Air Canada Vacations.”

Air Canada rouge's Caribbean services complement this summer's significant expansion to new European leisure destinations including Nice, Lisbon and Manchester, in addition to new service to Milan served year-round by the mainline carrier. It is understood that with its higher density cabin configuration and lower crewing costs that the rouge unit is performing better than the original expectations of Air Canada.

Air Canada rouge began operating July 1, 2013 with a start-up fleet of two Airbus A319 aircraft and two Boeing 767-300ER aircraft. The fleet grew to ten aircraft by the end of 2013 with the addition of six Airbus A319 aircraft and Air Canada rouge plans to add another five Airbus A319 aircraft and two Boeing 767-300ER aircraft by end of March 2014, for a total of 17 aircraft.

The growth of Air Canada rouge, in tandem with Air Canada's mainline fleet renewal and international network expansion, continues to be a key element of Air Canada's strategy for sustainable, profitable growth. Its development is being driven by Air Canada’s own fleet renewal with new Boeing 777-300ERs and 787-8s enabling older 767-300ER models to be redeployed with the leisure division.

Air Canada is scheduled to take delivery in February 2014 of the last of five new 777-300ER aircraft to enter its mainline fleet since June 2013, and the first three of 37 Boeing 787 aircraft by the summer of 2014. Air Canada is scheduled to take delivery of a total of six 787 aircraft in 2014 and the remaining 31 between 2015 and 2019.

The Canadian flag carrier is expected to average between eight and nine per cent capacity growth over the next four years through the arrival of the modern generation aircraft and the redeployment of older equipment with rouge. Although the new aircraft are initially mainly replacing existing jets they will provide future network growth opportunities and Air Canada is understood to be interested in using the efficiency of its new 787s to establish new links into markets in Asia and Latin America.

In our analysis below we look at scheduled capacity between Canada and the Caribbean over the past five years and the provisional schedules for 2014. Although Air Canada was no longer the largest carrier in this market in the past two years, the development of its rouge division will help it regain the number one spot in 2014. Our analysis shows air capacity in this market rose 151.1 per cent between 2009 and 2013 with last year’s levels up 25.9 per cent on 2012 due to growth from Air Transat, Sunwing Airlines and WestJet. The data is ranked by overall capacity across the six year period.