BRIAN DUNN / MONTREAL
New operator's costs will be at least 20% lower than those of mainline parent
Air Canada has unveiled Zip Air, its long-awaited western Canada-based discount carrier, which will take on WestJet from this summer flying between Calgary and Vancouver.
No launch date has been set, but the airline will begin domestic services from Calgary with six 117-seat Boeing 737-200s Air Canada inherited through its takeover of Canadian Airlines. The new operator is designed to cut Air Canada's costs and match, rather than undercut, fares at WestJet, according to Zip's president Stephen Smith, who is a former president of Calgary-based WestJet.
The airline will launch with 250 staff, including Air Canada pilots who will be paid 90% of their normal scale plus performance incentives. Within a year, Zip expects to double its fleet and add more short-haul routes within a 2.5h flight-time radius from Vancouver, Calgary and Edmonton, including to the USA. The carrier will eventually have up to 1,000 employees and operate a fleet of 20 737-200s. The aircraft will be painted in a series of bright colours.
The new airline will replace most Air Canada flights between Calgary and Vancouver. The flag carrier is assessing whether it still needs to maintain business- class seating on Air Canada flights for passengers connecting to international routes.
Zip's costs will be at least 20% lower than those of Air Canada's mainline fleet in part because Zip employees will be paid less than their Air Canada counterparts. Other cost-cutting measures include no meal service or in-flight entertainment, and Zip will operate a single-type fleet of 737-200s. It will operate independently of Air Canada although it will purchase maintenance services from its parent. Zip customers will be able to collect Air Canada Aeroplan frequent flyer points.
Zip is the fourth new Air Canada brand introduced in the last six months. It launched its Eastern Canada low-cost arm Tango late last year, followed by AC Jetz, operating a fleet of four luxury-equipped 48-seat 737-200s for professional athletes and corporate clients. It recently brought together its regional airline divisions under the Jazz brand.
Source: Flight International
