Air Canada has signed an agreement to amend and extend the Capacity Purchase Agreement (CPA) with Jazz Aviation, a wholly-owned subsidiary of Chorus Aviation, under which Jazz currently operates certain regional Air Canada Express flights.
The amendments should provide long term stability for Chorus, reaffirming Jazz as Air Canada's most significant Express carrier well into the future, as well as enabling growth on Chorus' leasing business through Air Canada's equity investment and the predictability of Jazz's cashflow from CPA operations until 2035.
The amendments will bolster the strength and competitiveness of the Air Canada Express brand and its coast-to-coast regional network, and provide significant CPA savings for Air Canada, while optimizing network and fleet flexibility when compared to the current agreement.
“We are very pleased to have arrived at this win-win agreement with Jazz and Chorus, which will give us long-term stability, more competitive cost certainty and the flexibility to modernize the regional fleet for the benefit of our customers. The Amendments will allow us to provide regional services more cost effectively so that we can compete more efficiently, deploying the aircraft best suited for a given regional market and also generate additional traffic to feed our international network,” said Calin Rovinescu, President and Chief Executive of Air Canada. “As further demonstration of Air Canada's commitment to a successful, long-term partnership, upon the CPA Amendments becoming effective, we will make an equity investment of CA$97.26 million in Chorus. In addition to aligning our mutual interests, we believe it represents excellent value for Air Canada shareholders.”
“We have jointly seized this unique opportunity to strengthen our long-term partnership for the next 17 years,” stated Joe Randell, President and Chief Executive Officer, Chorus. “We look forward to welcoming Mike Rousseau to our board of directors as his expertise will be truly valuable as we continue to execute on the growth and diversification strategy for Chorus.”
