Air Canada plans to join low-cost club

(Air Canada)

Air Canada is planning to launch a new low-cost carrier, according to reports in the Canadian press.

In another sign of how keen major national carriers are to capture some of the low-cost business, Canada's largest airline is planning to set up a new competitor to airlines such as WestJet and Air Transat, reports  Canadian newspaper Globe and Mail.

In the past year, several major European national carriers, including British Airways/Iberia and Air France, have been said to be mulling a low-cost subsidiary to attempt to win back traffic from independent brands such as EasyJet and Ryanair.

Air Canada's new carrier will offer cut-price tickets to leisure destinations including Mexico, the Caribbean and Europe, according to the report.

Ten aircraft have initially been earmarked for the airline, with their business-class sections to be removed to make room for more seating, although plans include the potential for expansion to a fleet of 50 planes.

With analysis from the Centre for Asia Pacific Aviation suggesting that Canadian budget airlines such as WestJet, Porter Airlines, Air Transat and Sunwing Vacations have been growing faster than Air Canada in recent years, it's unsurprising that the airline is looking to win back some of its customers - although it won't be for the first time.

The carrier has experimented with low-cost subsidiaries twice in the past, but the carriers, Zip Air and Tango, both folded within a couple of years.

Now, it will be looking to give consumers a taste of the sun at a comparable price to its rivals - something which many of the world's flag-carriers have managed to do successfully.

Australian national airline Qantas successfully took on Virgin Blue by setting up Jetstar, while Thai Airlines operates Thai Tiger and KLM has owned Transavia.com since 1991.

http://www.aircanada.com