Air Canada is moving its 737 MAX fleet to its low-cost subsidiary Rouge brand as part of its fleet plan, it said during its investor day conference. The airline has approximately 40 737 MAX aircraft.
The aircraft are expected to move to the low-cost carrier by 2028. Air Canada executive vice president, revenue & network planning and president, cargo Mark Galardo said during the event that the Air Canada's fleet strategy, including the incorporation of the 787 Dreamliner and the A321XLR, will be at the heart of its planned C$2bn EBITDA growth. The company is also planning to expand its A220 fleet as part of this strategy.
The transfer of the 737 MAX will “better position the brand” for its customers in the leisure segment, said Galardo. “The leisure market in Canada continues to be intensely competitive,” he continued. “For leisure carriers around the world, the 737 MAX is the gold standard in terms of economic and operational efficiency.”
He added that much of Rouge's current fleet is approaching end-of-life or is limited in range, which has “hindered” its competitive edge.
“By moving the 737 MAXs to Rouge we will be able to reduce our variable CASM [cost per available seat mile] significantly, increase our seat count, and offer a much improved competitive tool to address the leisure market,” he said. The CASM reduction is expected to be around 20% less than its existing A320-based fleet. With the 737 MAXs, Rouge will operate a west-coast base from the city of Vancouver.
With the consolidation of the 737 MAXs at Rouge, the carrier's fleet type will be reduced from three fleet types down to one. “This will allow us to run higher utilisation schedules and substantially reduce the seasonality swings that we have found at Rouge prior to the pandemic,” explained Galardo.
Beyond 2030, Air Canada said it is exploring options for a new ultra-long haul aircraft to add to its fleet. These new aircraft will support its strategy to move into fast growing international markets.