Air Canada (TSX:AC) says it has reached an agreement to expand the number of aircraft in its discount brand Rouge.
The deal was made in co-operation with its 3,500 pilots represented by the Air Canada Pilots Association.
Air Canada said the new arrangements amend the 10-year agreement it reached with its pilots in October 2014.
The airline expects the amendments will allow it to expand its presence in certain regional markets.
It said the new deal will also enable it to compete effectively with emerging North American ultra low cost carriers.
Also provided in the amendments are improvements for Air Canada pilots' defined-contribution plans and sick leave, and greater transferability between Air Canada and Rouge.