Airline Still Believes The Market Is Critical To Its Success

Air Canada has been looking for some time to enter the low-cost leisure market, saying it is "critical" to the long-term sustainability of the airline.

But Air Canada CEO Calin Rovinescu (pictured) says the only way to proceed is to be certain that the venture is truly low-cost, and for that he would need concessions from the carrier's unions in wages and benefits ... concessions that unions are loathe to grant.

Reuters reports that the airline's previous attepts at tapping the low-cost market were quickly folded into the main airline. And the airline's four major unions have been steadfastly hostile to a lower tier of wages and benefits for doing similar work. The pilots' union recently rejected a collective bargaining agreement that included provisions for a low-cost airline.

While other airlines have been able to prove the low-cost model, others, such as BA, Delta, and United have tried and abandoned their budget carriers. Some analysts think Air Canada should pull back and focus on making sure it's core airline is the best it can be before expanding into that segment of the market.

FMI: www.aircanada.com