When Air Canada first announced their Rouge LCC brand the plan was 13 destinations served from Montreal and Toronto using only 4 aircraft. And while there was no doubt that the Rouge route map would expand – at the expense of mainline services, naturally – it is not clear that the pace and breadth of the growth was expected. The Rouge operation is up to 21 aircraft and earlier this Spring headed west to include hubs in Vancouver and Edmonton. The most recent announcement, made earlier this week, will bring Rouge to Hawaii starting in November.
Map generated by the Great Circle Mapper - copyright © Karl L. Swartz.
Relative to the east coast operations the coverage out west is limited. Still, the growth presents an interesting challenge for passengers. Those who bought flights as Air Canada-operated and who are switched to Rouge-operated are being given the option to fully refund the existing booking. Plus everyone is being given a 20% off coupon for the new routes (bookings by 10 June 2014 for travel until April 30, 2015 using the promotion code “aloharouge”).
Rouge is expanding into markets where Air Canada faces competition from low cost carriers, which in this case is mostly a code phrase for WestJet. And it makes sense in some ways for them to try to compete on a level playing field, which is to say comparable service at comparable prices. But it is not entirely clear that their product or prices really are the same. And the challenges of running an airline within an airline are significant. Just ask Delta‘s Song, United’s TED (RAR!) and others. Still, Air Canada seems committed to this experiment, at least for the foreseeable future. And they’re not even to half the number of aircraft they planned to bring in to the fleet.
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Air Canada has lost me. @ 6’5″ a 29″ seat pitch will not work at all… and I’m not paying for more room!
I would compare Rouge to Qantas’ JetStar if anything.
The difference it seems between this and others noted is the difference in cost structure. They have different operating agreements with Pilots, Flight Attendants on a different pay and work scale, and are working to outsource non-heavy maintenance.
Not the first time for Air Canada, either. Zip operated in Western Canada with lower cost staff using ex Canadian Airlines 737-200s. When the unions and the airline negotiated to bring Zip staff up to mainline levels, Air Canada closed it up as it made no more sense.
Air Canada also operated Tango, which is closer to the model of TED et.al. It ‘suffered’ the same fate as well.
The big question for me is the price – for most routes, it seems like they have consistent pricing between mainline and Rouge. I think it would be easier for customers to understand if fares were 10% lower (it sounds like they’re targeting 30-40% reduction in CASM, so this seems like it would be doable).
With no fare reduction, there is more understandable outrage at paying the same amount for drastically reduced service.
If AC can get away with a zero fare reduction and a 30-40% reduction in CASM, why would they do that? From what I have seen, loads are not down.
I dont’t understand what Air Canada is doing and why they are performing so well. The price difference between Air Canada and rouge is very small. They are clearly going after west jet routes but West Jet offer significantly better service. Just my two cents