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Air Canada's Boeing 787 Dreamliner taxis toward a hangar after landing at Pearson International Airport in Toronto, May 18, 2014 (AARON HARRIS/REUTERS)
Air Canada's Boeing 787 Dreamliner taxis toward a hangar after landing at Pearson International Airport in Toronto, May 18, 2014 (AARON HARRIS/REUTERS)

Dreamliner delays put Air Canada's customer service push in peril Add to ...

The transformation of Air Canada’s network is running into some unexpected turbulence because of the later-than-expected arrival of some of the airline’s new Boeing 787 Dreamliners.

The airline has delayed 787 service to Haneda to July 15 -- it will start on July 1 with a Boeing 777. It has also put off Dreamliner service to Tel Aviv and been forced to lease planes from a European charter airline that offer fewer amenities, causing headaches for travellers and the airline as it fields customer criticism of Rouge, its new low-cost airline.

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Some of the problems are beyond Air Canada’s control and temporary – the carrier is scheduled to take possession of its second 787 on Tuesday and the third aircraft in the 37-plane order is to be delivered in mid-summer – but they could damage the airline’s attempts to match improvements in customer service with the turnaround in its financial performance.

“It is going to be like Russian roulette when passengers show up for their flights this summer,” said one analyst who follows the company, pointing to the plan to use leased euroAtlantic Airlines 767s instead of Air Canada 767s on new routes to Madrid, Lima and Bogota from Toronto this summer and the switch to Rouge from Air Canada mainline service on some routes.

The purchase of the Dreamliners from Boeing and the creation of Rouge a year ago are key elements of the airline’s strategy to turn itself into a consistently profitable company.

The 787s are more fuel-efficient than existing Air Canada planes and on some routes deliver more passengers at a lower cost. Rouge is designed to compete with Sunwing Airline Inc. and Air Transat, and allow Air Canada to restore service on routes it had abandoned because it could not compete with those low-cost carriers.

“We have to change what was the status quo,” said chief commercial officer Ben Smith. “The model we had prior to what we’re putting in place today was not working and not sustainable.”

The late arrival of the 787s means Air Canada was forced to lease euroAtlantic planes. The planes will be flown and staffed by that airline’s crews on new flights to Madrid, Lima and Bogota.

The first two 787s will be used on daily Toronto-Haneda flights, which were supposed to start July 1, but have been pushed back to July 15.

The third 787 was scheduled to replace a Boeing 767 on the Toronto-Tel Aviv run in early July, which would have freed up the older Air Canada plane to fly to Madrid, Lima or Bogota.

The euroAtlantic planes and crews will fly those three routes between July 1 and Aug. 6, Air Canada said in a notice posted on its website. The third 787 is scheduled to begin Toronto-Tel Aviv service on Aug. 6.

There are no business-class seats on the euroAtlantic planes, they carry overhead entertainment systems instead of seatback units and the seats are narrower than the Air Canada 767s.

One passenger, who booked a Toronto-Madrid flight in March for travel in July, said he was offered a 15-per-cent discount on his next flight because of the switch to the euroAtlantic plane with fewer amenities.

The passenger said he could find no other direct flights to Madrid from Toronto so if he cancelled his Air Canada booking, he would have to fly through a U.S. city, which would make his trip more costly and less convenient.

“If I stick with this [euroAtlantic] flight I’ll be getting a second-rate charter flight – tighter seating, dingier interior – when I paid for a mainline flight,” he said.

Air Canada looked at other options to Spain and the two South American capitals, spokesman Peter Fitzpatrick said, including cancelling them. But some passengers have booked up to a year in advance so their holidays would have been ruined, Mr. Fitzpatrick said.

Air Canada is also experiencing some backlash from customers who have been switched from its mainline service to Rouge, to the extent that some travellers have complained on social media sites about being “Rouged.”

Rouge is designed as a low-cost offering aimed at leisure travellers, but there are numerous complaints about the lack of amenities and the tight seating.

Actor Rob Lowe went on a tirade on Twitter last month on a Rouge flight to Los Angeles from Vancouver.

“People are irate on this Air Canada ‘Rouge’ flight. C’mon people, who needs leg room or comfortable, regular-sized seats when you have HATS!” Mr. Lowe tweeted.

Several reviews on Skytrax, a Britain-based airline ranking and review site that has ranked Air Canada the top airline in North America for the past four years, have also been critical.

“Rouge represents a major drop in quality from Air Canada,” one reviewer wrote this month. “From my perspective this has severely damaged the Air Canada brand and presents a big opportunity for its competitors.”

Of 33 customer comments posted this month, 29 were negative.

“Air Canada has worked so hard – and I think deserves a lot of credit – since its restructuring at rebranding itself, improving the customer service; making a great in-flight experience,” said analyst Ben Cherniavsky, who follows the company for Raymond James Ltd. in Vancouver. “There are a lot of people who prefer to fly Air Canada and I think that’s at risk of changing when you downgrade your product so dramatically.”

Air Canada is happy with the financial performance of Rouge, Mr. Smith said.

Part of the issue, he noted, is that some customers expect Air Canada mainline service and amenities and don’t realize that Rouge is designed as a low-cost offering.

Part of the answer to that is educating customers and managing their expectations, chief executive officer Calin Rovinescu said on the airline’s first-quarter financial results conference call last month.

But the airline has also responded to criticism by changing the way it handles conversions of existing mainline routes to Rouge.

Rouge will take over Air Canada’s Vancouver-Honolulu and Vancouver-Maui flights near the end of this year. Passengers who have already booked the flights to Hawaii will be offered 20 per cent off on future travel and refunds if they don’t want to fly Rouge.

Editor's Note: An earlier online version of this article incorrectly said Air Canada has delayed flights to Haneda. This version has been corrected.

Follow on Twitter: @gregkeenanglobe

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