Air Canada has shut its Calgary-based discount subsidiary Zip Air and is withdrawing its colourful fleet of 12 Boeing 737-200s at Vancouver before turning them back to their lessors. At least one aircraft has already been flown to Mojave, California, for storage.
Launched two years ago, Zip was billed as a low-cost competitor to local rival WestJet, and replaced many of the flights operated by Air Canada. However, the parent company has decided to fold Zip back into the mainline operation after labour concessions brought its own costs onto a par with, or lower than, Zip's. Air Canada is scheduled to emerge from bankruptcy protection on 30 September.
Most of Zip's 400 employees have been transferred to Air Canada and about 55 management and non-unionised staff have been reassigned or offered severance packages. ZIP's short-haul routes have been reintegrated into Air Canada's schedule.
Source: Flight International
