June 6, 2012 / 9:19 PM / 5 years ago

Air Canada COO to retire, May traffic dips

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TORONTO (Reuters) - Air Canada said on Wednesday that its chief operating officer will take early retirement this fall, as the country's largest airline pursues plans to launch a low-cost carrier.

The Montreal-based carrier did not announce a replacement or give a reason for the departure of Duncan Dee, who worked at Air Canada for 15 years. It said he would "remain available to Air Canada" after he retires.

"His resignation comes as a surprise, but I'm certain that there's a number of very talented operational folks at Air Canada who are able to manage the role and I'm sure they'll appoint somebody in due course," said Chris Murray, an analyst at PI Financial.

Dee, hired by the company in 1997, was appointed Chief Operating Officer in 2009, responsible for operations, customer service, government affairs and corporate security.

Named one of Canada's 'Top 40 under 40' in 2005, Dee worked for the government of Canada before joining Air Canada. He was a spokesman and legislative assistant for Liberal Deputy Prime Minister and Heritage Minister Sheila Copps in the 1990s.

Air Canada said on Monday that it is studying four models for launching a low-cost carrier, despite strong opposition from its 3,000 unionized pilots.

The airline said on Wednesday that it flew slightly emptier planes in May, a month after wildcat strikes by pilots and machinists disrupted operations.

Disputes between the airline and two unions have been handed over to government arbitrators, who will impose a binding agreement before the end of August.

Air Canada said its load factor - or the percentage of available seats filled with paying customers - dipped to 81.6 percent from 82.2 percent in May 2011. System traffic increased 1.8 percent as capacity rose 2.5 percent.

Murray said the numbers "were a little bit behind what we were looking for."

The lower load factor contrasts to gains reported on Tuesday by rival WestJet Airlines, Canada's second-biggest airline. WestJet also said reservations for the approaching summer months were strong.

Privately-owned regional airline Porter also said it flew fuller planes in May, as its load factor rose to 60.5 percent from 59.4 percent.

Shares of Air Canada closed 1 Canadian cent higher at 91 Canadian cents on the Toronto Stock Exchange.

Reporting By Susan Taylor, additional reporting by Randall Palmer in Ottawa

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