Air Canada Planning Low-Cost Airline

The new airline would build on growing demand for cheap flights to the Caribbean and Europe.

Air Canada intends to launch a low-cost, vacation-oriented airline to compete with the likes of Air Transat and Sunwing. The as-yet-unnamed airline would focus on destinations in the Caribbean, Mexico, and Europe with a fleet of 10 planes that could grow to as many as 50. Air Canada's pilot union is set to vote upon an agreement next week, and another four of the carrier's unions have yet to see one. The new airline would need cheaper pilots and staff to keep its costs competitive with the other “low-cost carriers,” a segment of air travel that has grown rapidly over the past decade as more and more Canadians head south on the cheap during winter.