CORRECTED-Air Canada picks 'Rouge' as name of low-cost carrier

Tue Dec 18, 2012 1:08pm EST
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(Corrects third paragraph to July, not June, and removes "United States")

TORONTO Dec 18 (Reuters) - Air Canada will begin flying to European and Caribbean vacation spots next year under the "Rouge" banner, the airline said on Tuesday, disclosing details about the ne w low-cost carrier it hopes will provide a springboard for sustained profitability.

Montreal-based Air Canada, the country's biggest airline, is launching Rouge at a time when Canadians have a growing number of options for vacation travel. It will compete with Transat , WestJet Vacations and Sunwing Travel Group.

Rouge will offer cheap flights to tourists visiting the Caribbean and Europe, starting July 1, 2013 - not June, as was previously announced.

Tickets have gone on sale for flights to Venice, Italy; Edinburgh, Scotland; Athens, Greece; Cuba; the Dominican Republic; Jamaica and Costa Rica, Air Canada said in a statement handed out to reporters at a Toronto event to announce the operation's name.

The fight for share of the vacation market has become more important for Air Canada as main rival WestJet prepares to launch Encore, its Canadian regional airline.

Encore promises to undercut Air Canada fares on domestic short-haul flights.

Rouge, which will fold Air Canada's existing vacation package business into the new low-cost operation, will initially fly four planes from Air Canada's mainline fleet.

As Air Canada takes delivery of Boeing 787 Dreamliner aircraft, starting in 2014, it will funnel more planes into the Rouge operation. It said it planned to reach 50 aircraft in three to five years.   Continued...