AC suspends talks over low-cost Pacific carrier over timing concerns

Discussion in 'Air Canada | Aeroplan' started by tcook052, Oct 23, 2012.  |  Print Topic

  1. tcook052
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    tcook052 Silver Member

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    Air Canada’s strategy to branch out into discount international service to and from Vancouver has stalled after the airline suspended talks for a joint venture with Virgin Group Ltd. to launch Pacific flights.

    Air Canada had retained Boston Consulting Group to help develop a low-cost carrier for service between Vancouver and Asia. But after months of studying and planning, Canada’s largest airline has opted to shelve the initiative amid concerns about whether the timing is right to strengthen Pacific routes.

    Ben Smith, Air Canada’s chief commercial officer, spearheaded planning earlier this year for the joint venture, which had the code-name VP – short for Virgin Pacific.

    Montreal-based Air Canada would have owned a 40-per-cent stake, Virgin Group 40 per cent and an undisclosed financial partner 20 per cent, said an industry insider. Boston Consulting Group and Air Canada executives held a corporate retreat at Mont Tremblant, Que., last spring in an effort to forge ahead with the Vancouver-based project, he said.
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