Grand Chief Derek Nepinak (NEE-pin-ack) says the airline was half-hearted in its attempt to make things right over the internal missive.
The memo, which surfaced over the weekend, says employees will be staying at a hotel closer to the airport due to security concerns downtown and notes that 1,000 displaced people from rural Manitoba are staying in hotels in Winnipeg's core.
The assembly says the reference to the evacuees is racist because many of the people come from a northern reserve affected by flooding.
Air Canada apologized to anyone who was offended by the statement, but declined to comment further.
Nepinak says three aboriginal organizations in Manitoba have joined together in a letter to Air Canada's CEO, demanding an official retraction.