Air Canada pairs low-cost carrier with vacations business to battle package operators

Air Canada's plans to create a new leisure group business, pairing its existing vacations business and its new low-cost subsidiary, is set to debut in Jun-2013 and should prove an interesting strategy to combat some of the heavy hitters in the Canadian tour business - including the carrier's familiar rival WestJet and other competitors Sunwing and Transat.

To illustrate it is serious, Air Canada has appointed a seasoned travel industry veteran to head the new venture, which appears to have the dual role of shoring up the performance of some lacklustre markets and its existing vacations business.

The carrier is also adjusting its mainline fleet as it plans to launch the new low-cost carrier with two Boeing 767 widebodies and two A319 narrowbodies. Two Boeing 777-300ER aircraft are scheduled to join Air Canada's fleet in Jun-2013 and Sep-2013.