Air Canada has announced an agreement to amend 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.
Through the revised agreement, Air Canada will transfer operation of its Embraer E175 fleet to Jazz from Sky Regional and Jazz will become the sole operator of Air Canada Express services. The revisions to the CPA are subject to Jazz reaching an agreement with the Air Line Pilots Association, International. If this condition is satisfied, the CPA will be amended on a retroactive basis to January 1, 2021.
“Air Canada is consolidating its regional flying with Jazz in response to the ongoing devastating impact of COVID-19 upon the airline industry. This necessary realignment of our regional services will help Air Canada achieve efficiencies and reduce operating costs and cash burn by consolidating its regional operations with one provider. Moreover, by streamlining the regional fleet, this agreement will also position Air Canada to operate more competitively with a single provider as traffic returns following the pandemic,” said Richard Steer, Senior Vice President, Operations and Express Carriers.
As a result of the CPA revisions and consolidation of regional flying, Air Canada expects to realize CA$400 million in cost reductions over the 15-year term of the agreement (CA$43 million per year until 2026 and CA$18 million per year thereafter). (US$1.00 = CA$1.26 at time of publication.)