As a customer who has been traveled with Air Canada, I don’t consider Air Canada as a low-cost company. Since the company has a Focus Strategy and it is not low cost like Ryanair does, they should find a way to differentiate themselves before expanding. Not by cutting the limit of checked bags to one, Air Canada should think of providing flight passes for international passengers. Especially for Canada, an immigrate country, many people who are not residents could travel back and forth internationally with Air Canada. 

Besides, Air Canada doesn’t have much of a supplier power. With tons of substitutes such as British Airway and Lufthansa who also have similar or cheaper pricings, Air Canada does not have a cost advantage. Thus, buyers like me would rather choose other cheaper airline companies or those who allow two checked bags.

Finally, they use Boeing 787, which was banned for a period of time because of some battery issues. Even though it is low cost and more fuel-efficient, passengers would never save money on their lives. Just focus on the current market and figure out how to lower the price in order to get the most profit out of us customers.

Link to the news article: http://www.theglobeandmail.com/report-on-business/air-canada-to-expand-european-service-keeps-eye-on-costs/article14741761/