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Air Canada open to ultra-low-cost air fares to compete in changing market

An Air Canada jet takes off from Halifax Stanfield International Airport in Enfield, N.S. on Thursday, March 8, 2012.
An Air Canada jet takes off from Halifax Stanfield International Airport in Enfield, N.S. on Thursday, March 8, 2012. THE CANADIAN PRESS/Andrew Vaughan

Air Canada is open to launching an ultra-low-cost airfare plan, to keep up with the changing market.

But they won’t make concrete plans until other ultra-low-cost airlines get started and are successful.

“At this point, we are readying ourselves to compete,” Air Canada spokesman Peter Fitzpatrick said in an email, “but we have not provided additional information on routes or fares as we first need to see what these new entrants will bring to market.”

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Air Canada officials made the announcement at its annual Investor Day presentation on Wednesday.

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The move comes as more and more airline companies have already delved into the cheapening airfare market.

Earlier this month, Flair Airlines (who bought NewLeaf travel) announced it was expanding its cheap fares to Pearson International, Vancouver International and Kelowna International airports.

READ MORE: Flair airlines expands to Toronto, Vancouver and Kelowna

And Canada Jetlines has announced that it’s working to operate an ultra-low-cost model out of Hamilton’s John C. Munro International Airport and Waterloo International Airport, starting next summer.

Canada’s second-biggest air travel company, WestJet, also plans to create an ultra-low-cost fare early 2018. Those plans were announced in April.

Along with the option of launching the new fare, Air Canada is also expanding their low-budget Rouge line to more destinations.

Is Canada finally ready for low-cost airlines?

There have been a few attempts, and a few failures, when it comes to low-budget airlines in Canada.

But it might be time for a success.

That’s because Canadians are more used to the model now, says Karl Moore, associate professor at the Desautels Faculty of Management at McGill University.

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He says there were many Canadians on a recent discount flight he took to Iceland.

“We’re getting more used to [ancillary fees], we’re not as upset by it,” Moore told Global News.

READ MORE: Flight prices in Canada down 23% on routes served by low-cost carrier NewLeaf

He also said the fact that the big name airlines are getting into the business could be a good thing.

“West jet has the brand name recognition, Canadians’ confidence, and it’s a big airline with something like 12,000 people. And that gives them a big leg up,” he said.

“So, Canadians might trust them.”

There are still some issues about the geography that could cause a problem; in Europe, there are multiple airports for the same city, which allows the budget airlines to fly out of a cheaper airport – that’s not the case in Canada.

“Some of the elements of the ultra-low-cost model will be hard to replicate in Canada, but I still think that a lot of the cost savings that they’re getting they can get it here as well,” he said.

*With a file from Sarah Cain 

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