UPDATE 1-Air Canada picks 'Rouge' as name of low-cost carrier

Tue Dec 18, 2012 2:03pm EST
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* Tickets already on sale; operations to start July 1, 2013

* Low-cost carrier to focus on leisure travel

* Shares rise 5.3 percent to C$1.79 on TSX

TORONTO, Dec 18 (Reuters) - Air Canada's new low-cost carrier will begin flying to European and Caribbean vacation spots next year under the name "Rouge", the airline said on Tuesday of the service 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.

"The Air Canada Leisure Group will be well positioned in the highly competitive but growing leisure segment in Canada, with its strong value proposition and competitive cost structure," said Michael Friisdahl, who is heading up the new venture, at a launch event in Toronto.

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

Tickets went on sale on Tuesday for flights to Venice, Italy; Edinburgh, Scotland; Athens, Greece; Cuba; the Dominican Republic; Jamaica and Costa Rica.

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.   Continued...