Transpacificflyer

Yes and no. Please consider the following taken directly from AC investor highlights;
Calin said: "Performance of our leisure carrier subsidiary has continued to exceed our expectations. Just one year after its launch in July 2013, Air Canada rouge has served almost 2.5 million customers, including one million this past quarter, contributing to record system-wide load factors for the second consecutive quarter."

Approximately 55 per cent of this forecasted capacity increase will be through the continued lower-cost growth of Air Canada rouge

My interpretation is that with the conversion of routes to rouge, where the payroll costs are lower and more pax are crammed onto the planes, that yes indeed a greater profit can be taken. However, as consumers have a chance to experience AC rouge, and are dissatisfied, they will be more open to alternatives such as Sunwing and Air Transat. One of the key differences between these LCCs was AC's superior offering. IMO the pax are being pushed to rouge because there are limited options available on those specific routes. On routes where there are real alternatives, even if serviced by Sunwing and Air Transat, rouge will not necessarily be the number 1 preference. Given time, consumers will seek to avoid rouge. I don't think any other airline in the past 5 years has had the intense negative response as rouge has racked up as shown by feedback sites such as skytrax, and assorted air industry blogs. I believe that rouge in 3 years time will not be the rouge we see today.