Air Canada Revises Regional Capacity Purchase Agreement With Chorus Aviation
Air Canada has revised their capacity purchase agreement (CPA) with Jazz Aviation, LP, a wholly-owned subsidiary of Chorus Aviation, Inc. Under the agreement Jazz currently operates certain regional flights on behalf of Air Canada Express.
On Monday (March 1, 2021) announced that they have revised their capacity purchase agreement (CPA) with Jazz Aviation, LP, a wholly-owned subsidiary of Chorus Aviation, Inc. Under the CPA, Jazz currently operates certain regional flights on behalf of Air Canada Express. Through the amended agreement, Air Canada will transfer the operation of their Embraer E175 fleet from Sky Regional and Jazz will become the only operator of Air Canada Express services. The revised CPA is subject to approval by the Air Line Pilots Association (ALPA) International and if approved, will be retroactive to January 1st, 2021.
In Monday’s announcement, Air Canada’s Senior Vice President – Operations and Express Carriers, Richard Steer, said,
“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.”
Also commenting on the revised CPA, Air Canada’s President and Chief Executive Officer, Michael Rousseau, added,
“Sky Regional has provided excellent service to Air Canada and its passengers over the past decade with an impeccable safety record and excellent on time performance and cost management. We thank Sky and all of its employees for their effort, dedication and valued partnership.”
Air Canada expects to realize $400 million in savings over the 15-year term of the revised CPA and regional consolidation including $43 million/year through 2026 and $18 million per year thereafter. The amended CPA also provides the airline with near term cost certainty, reduced regional flying compensation, operational cost savings, and an estimated future fleet-related CAPEX reduction of $193 million.
Air Canada is Canada’s largest domestic and international airline, serving over 51 million guests in 2019. The Canadian flag carrier is a founding member of the Star Alliance and the only international network carrier in North America to receive a Four-Star ranking from Skytrax, who also named the carrier ‘2019 Best Airline in North America.’
Source: Air Canada