Air Canada’s improved results supported by rouge concept

Air Canada rouge Airbus A319-114 (c/n 697) C-FZUG arrives at Los Angeles International Airport (LAX/KLAX) on January 24, 2015.

(Photo by Michael Carter)

Air Canada leisure affiliate rouge has “proven its case” by lowering costs for the Canadian flag carrier, CEO Calin Rovinescu told ATW last week on the sidelines of the Star Alliance meeting in Warsaw.
                                                                       
The Montreal-based flag carrier posted a 2014 net income of C$105 million ($90.3 million), more than a tenfold improvement over full-year net profit of C$10 million in 2013. Its first-quarter 2015 net loss of C$309 million was narrowed from a C$341 million loss in the year-ago quarter.

“We had a record year in 2014 and a very strong first quarter in 2015, rouge have proven its case with a CASM reduction of about 30% versus mainline aircraft,” Rovinescu said.

He added that the rouge concept will be permanently updated. “We are taking out the IFE [inflight entertainment] systems and brought in iPads. This makes them lighter, more fuel-efficient. We took out tons of equipment. Pilots and flight attendants are working under different rules. All this combined has delivered these results,” he said.

Air Canada rouge, which is currently operating a mix of Boeing 767-300 and Airbus A319s, should grow from 30 to 50 aircraft.

“Once [we take delivery of new fuel-efficient aircraft Boeing 787-8s and -9s], we will send the 767s to rouge,” he said.

Rovinescu is pleased that Air Canada, as a Star Alliance member, continues to grow on North Atlantic routes.

“North Atlantic continues to be very strong. We added tactical capacity and sent rouge to destinations like Venice, Athens and Barcelona. It is paying off big time, because with the leisure segment rouge we can offer this kind of direct service.”

He said rouge allows Air Canada enormous swing-capability for seasonal demand that the company had never seen before. “We can swing from a European leisure capacity in the summer to Caribbean and Mexico capacity in the winter,” Rovinescu said.

(Kurt Hofmann - ATWOnline News)