Tango was never meant to be "low cost", as in overall lower operating costs. It was a different brand within a brand and was actually quite successful. It's now implemented on mainline fares, Tango basically means lowest fare. It allowed Air Canada to separate it's mainline brand (higher service) without alienating its mainline pax. When it integrated these fares within the mainline fare, they were able to sell the same brand (concept) within mainline. You pay less, you get less is the "low cost" meaning on these fares. This also helped AC
introduce it's a-la-carte fare options by adding on items such as food, bags, etc. Tango was also a longer haul, sun destination airline. The name comes from 'tan and go', as you would when you head to Mexico or the Caribbean.
Zip was different, the FA
's were non-unionized, the pilots were part of mainline (as Rouge will be, albeit on a lower pay scale). Zip wasn't meant to fly out east, it was started with the same aircraft as WestJet (737-200) to compete with it on the same routes out west. This airline was discount, no frills, low cost. It was started while AC
was in CCAA and was eventually absorbed by AC
after they excited bankruptcy protection (CCAA).
There is a method to the madness, I suppose. Whether this is a long term thing, we shall see. But I definitely understand why they're doing this. This is going to allow them to compete with the likes of Transat, WestJet and Sunwing. Mainline is losing too many routes from the stiff competition these companies are providing. This at least allows them to compete on a lower cost structure and it does effectively differentiate mainline flying from the leisure division. I think you're going to see a fairly significant transformation of mainline with a different business class on the newer aircraft, premium economy etc. They will no longer have to mix the two concepts of leisure and business into one airline. This allows them to tailor to one or the other. There is now a push from the uppers internally to obtain "4 star" airline status on mainline and I think they know what needs to be done for that to happen. That doesn't include low yield routes to leisure oriented destinations.