Dec. 2, 2014: Air Canada says its new Boeing 787s will have 29% lower fuel, maintenance and per-seat costs than the old Boeing 767-300ERs being replaced.
Part of this is because the 787s seat more passengers.
But the airline has found new life in the 767s through increased density, shifting them to its low cost carrier, Rouge, which has lower labor costs and overhead. Rouge’s 767s have 30% lower CASM costs than the same airplane at mainline Air Canada.
Michael Rousseau, executive vice president & CFO of Air Canada, made the remarks today at the annual Credit Suisse Global Industrials Conference in New York.
Air Canada, which has a long history of poor financial performance, is further improving its revenue picture by reconfiguring its mainline fleet to “more competitive” seating. It’s accepted five high-density Boeing 777-300ERs with 100 more seats (458 in total) than those in its fleet, for service on high demand, coach class routes with low premium demand, such as Montreal-Paris and Vancouver-Hong Kong. Air Canada is converting older -300ERs and 777-200LRs to “more competitive configurations,” says Rousseau.
The LCC subsidiary, Rouge, currently has 20 Airbus A319s and eight 767-300ERs, all in high density configuration and all from the mainline fleet. The A319s have 23% lower CASM costs at Rouge, with higher density and lower overhead, than at Air Canada. Rouge will eventually have 50 aircraft. These are all deployed to leisure markets, such as the Caribbean and some European routes, Rousseau said there are and will be no markets in which Air Canada and Rouge overlap.