Air Canada goes Rouge with new leisure destination service


It isn’t quite a new carrier and it isn’t quite a discount carrier. It won’t involve service to new destinations and it won’t really alter the way flights are sold. Air Canada‘s new Rouge operation is launching in 2013 and there will be changes but probably not enough to help the airline-within-an-airline model succeed. Rouge is targeting leisure routes. There will be 13 destinations covered by the rouge service including three in Europe and ten so-called "Sun" destinations. The rouge fleet is small – only 4 aircraft – so most destinations will apparently not be served daily.

The infrequent service is unfortunate in some respects but it makes a bit of sense for leisure markets where there is limited demand. There are several other aspects of the service which also speak to the limited amenities associated with leisure/LCC operations. Most in-flight services will be on a paid basis. Meals will be complimentary on flights to and from Europe but the Sun routes will be buy-on-board for everything. The in-flight entertainment systems will take advantage of newer streaming media options, saving the company money. But passengers are likely going to be paying to access that content; full details on the price and systems are not yet available. Oh, and no in-seat power will be provided so hopefully the tablet, phone or laptop batteries are fully charged and long-lasting.

Where Air Canada is really cutting away at the value, however, is in the integration with their Aeroplan frequent flier program. Rather than offering earning based on the distance flown routes operated under the rouge brand will earn a fixed number of points based on the fare paid. And the earning rates are not at all pretty.

image

Flying a cheap fare from Toronto to Athens on rouge will net most passengers fewer than 1000 points. That same trip flown on Air Canada and other partners would net 10,000 points or more. Certainly for the very occasional traveler those accrual numbers don’t necessarily matter; there is a good chance they’d never get good value out of the 10,000 points either. But the skewing of the rates is rather severe.

Also potentially confusing is that, because it isn’t really a separate operation, the rouge flights are mixed in with the regular search results on the Air Canada site. Here’s what a search from Toronto to Athens looks like:

image

There is no indication that the direct flight, saving around 3 hours of travel time, comes with distinctly different services, both in-flight and on the ground. Hovering the mouse over the fare names at the top gives some additional details but not all of them. Once the flight is selected there are some additional details offered:

image

Still, the mixed levels of service have the potential to be rather confusing to customers. Also, it is not clear how these flights will register with Air Canada’s Star Alliance partners. That could lead to even more customer frustration. Air Canada has confirmed that the flights will still be considered Star Alliance-operated with respect to partner benefits. So in many ways these are way better for customers of Air Canada’s partners than for Air Canada’s direct customers:

image

Air Canada is facing stiff competition from lower cost competitors, including Air Transat and WestJet, competitors which have a similarly limited offering to the new rouge services. But for those competitors there is no confusion amongst the customers; all the service is at that same level. And, at the end of the day, meeting the expectations of customers is more important that having the best product in the market. Air Canada is creating quite the opportunity for such confusion, a move which may ultimately prove to be the downfall of rouge.

Never miss another post: Sign up for email alerts and get only the content you want direct to your inbox.


Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.

13 Comments

  1. Maybe this demonstrates the drawback of having sold their frequent flyer program. They have to buy the miles, and are trying to minimize that cost.

    Wonder what happens if you buy it as a codeshare and credit to another program

  2. @carl I doubt these flights will be code-shared. In the end, this airline within an airline is about different labour standards. The pilots and FAs are working with different contracts, so it will be around in one way or another. Once the replacements for the 319s come and the 787s more aircraft will shift to Rouge.

  3. If it’s $186 ai one way, you get what you pay for! Great transcon price – assuming it’s not off season.

  4. Even including YQ, the fares are probably waaaaay below TangoPlus on mainline AC. Excellent deal for budget conscious tourists (assuming up the seat pitch doesn’t induce DVT)

    1. Yes, Cristina, it is rather below the TangoPlus fares. But the TangoPlus or Latitude fares on rouge and normal AC flights are actually the same. And you still get the lower levels of service and points. The only real value the product presents is the non-stop service in these markets while staying on AC metal. And it isn’t clear that’s really of great value given the product they’re offering.

  5. I find the integration with Air Canada mainline the most interesting part about this venture. It seems more of a way of AC transferring routes to a lower cost service than to start up an airline from the ground up like how Jetstar did. Right now, Jetstar is essentially also a competitor with parent company Qantas, and I have a feeling ACs way of handling Rouge is to prevent Rouge from eating into AC mainline’s profits. Hence, this is really a method of directly competing with vacation carriers such as Air Transat, Cordor, and Westjet with a much lower cost operation.

  6. Question though (forgot to ask this), does that mean I could also earn miles on another Star Alliance carrier’s frequent flyer program given that it is operated on the AC IATA code and that other partner benefits seem to apply? So on a program like UA, I can essentially earn 100% miles on a tango fare?

    1. I’ve asked of Air Canada about the partner earning, Adrian. I have not yet heard back. Suppose I’ll have to ask again.

Comments are closed.

BoardingArea