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Air Canada says it didn't mean to offend anyone when it decided to move its flight crews out of a downtown Winnipeg hotel and cited "displaced people" for safety issues in the area.

In a controversial memo issued last month, the airline said it would house overnight crews at Winnipeg's airport instead of at a downtown Radisson hotel, where the area had "questionable safety."

But the decision to move the crews and the carrier's reasons for it have faced stiff criticism from Winnipeg Mayor Sam Katz and local business groups, who say that crime is not a major issue in the city's core.

On Monday, Manitoba First Nations leaders added their voices to that list, saying the memo is racist.

"It's entirely inappropriate for one of Canada's largest corporations to link the presence of our people in the downtown core with any security risk," said Grand Chief Derek Nepinak, from the Assembly of Manitoba Chiefs.

"It's corporately irresponsible," he added, saying that a boycott and a potential legal suit could result if Air Canada does not issue a public apology.

Nepinak was referring to a section of the memo that stated "recent environmental issues have forced approximately 1,000 displaced people from rural Manitoba to numerous hotels in the downtown area."

The memo went on to link the temporary residents and instances "of public intoxication, resulting in several downtown locations being susceptible to crimes of violence and opportunity."

On Monday, the airline stated that unintended "inferences are being drawn" from the internal memo.

"Air Canada wishes to state categorically it had no intent to cause offence to any individual or group and apologizes if it inadvertently did so," said airline spokesman Peter Fitzpatrick in an email to media.

Initially, the airline said it would not comment on the issue on Monday. But the official statement was released after Â鶹ӰÊÓ requested comment following the public remarks from First Nations leaders.

While the airline apologized, it made no mention of reversing the decision to stay away from the city's downtown -- something that mayor Katz was hoping for.

"We are no different than any downtown, but what Air Canada has decided, based on the points they sent out, has been totally contradicted," he said, adding that he was "hopeful" the airline would reconsider.

Meanwhile, panhandlers like Junior Linklater, who was on a downtown street collecting change on Monday afternoon, say they are not out to cause any problems.

Linklater, who was sitting near the Radisson, told CTV Winnipeg that he was only there to collect a few dollars.

"We don't pick on nobody, and they say, ‘Hey, you guys try to be gangsters.' No, we are just panhandlers of Winnipeg," he said.

The Air Canada controversy stands in stark contrast to a recent upswing of civic pride in Winnipeg, much of which stems from the return of the NHL's Jets to the city.

The team's home is the MTS Centre, located downtown and adjacent to sports bars and businesses that have been enjoying an uptick in business since the team's pre-season opener last month.

The city hopes the team's presence will continue to provide an economic boost in the area, and local officials have take strides in recent years to improve the core through new construction projects and an injection of arts funding.

This past weekend, for example, more than 30,000 locals crowded into the downtown for the city's edition of the all-night art festival, Nuit Blanche.

The city is also constructing a human rights museum in the core, which is expected to draw thousands.

With a report by CTV's Jill Macyshon in Winnipeg