Air Canada to launch new, low-cost carrier? Sounds like good news for consumers

The Canadian airline industry keeps getting more interesting every day, and this time it could be good news for the little guy.

Reporting in today's Globe & Mail, reporter Brent Jang talks about Air Canada's plan to create a "discount, leisure airline to complete on routes to Europe, Mexico, the Caribbean and other popular vacation spots."

The Canadian industry has been in turmoil for some time, given the Sunwing-Signature merger in 2009, the growth of Porter, the coming (May 1) return of Air Canada planes to the Toronto Island airport, and West Jet's attempt to muscle in on more of the Toronto-Montreal-Ottawa biz market. The Air Canada discount move would be yet another shift in the industry landscape.

Jang's story talks about Air Canada starting with 10 planes and potentially increasing that to 50, a move that he says "will ratchet up the competitive pressure on tour operators such as Transat A.T. Inc."

Air Canada, like other airlines, is just emerging from a rather nasty economic hole, so it's an interesting statement on their part.

I, of course, would LOVE to see more chances for Canadians to save money on flights. The cost these days is absolutely horrendous. I just looked last night into the details for a flight to San Francisco in June and the best deal I could find on Air Canada was almost $800! Even flying through Buffalo and making a stop along the way didn't seem to help, with the cheapest ticket I could find being something like $500.

I guess we know where some of that money is going. Reports across Canada this morning suggest Air Canada union folks are outraged over the news that Air Canada chief exeecutive Calin Rovinescu last year collected salary and benefits that totalled $4.6 million. That's a 75 per cent increase over the $2.6 million he got the previous year, according to Reuters.

AC union folks called Rovinescu's 2010 earnings a "disgrace."

"The Air Canada bargaining committee and our union will be demanding equal improvements and solid gains from Air Canada," said Ken Lewenza, national president of the Canadian Auto Workers CAW.

Reuters reports that Air Canada's shares are down by more than a third this year, partly on worries about strikes at Canada's biggest carrier as it negotiates new labour contracts with all its unions.