Air Canada has announced an agreement to amend its agreement with Jazz Aviation, which will become the sole operator of regional air services offered by Air Canada Express.
Under the amended Capacity Purchase Agreement (CAC) with Chorus Aviation (which owns Jazz), Air Canada will transfer the operation of its fleet of Embraer E175 aircraft, currently operated by Sky Regional, to Jazz.
"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," said Richard Steer, senior vice-president, operations and Express Carriers.
Steer specifies that this alignment of regional services will allow Air Canada to gain in efficiency, reduce operating costs and slow down the depletion of its capital by consolidating its airline activities regional under a single supplier.
Air Canada expects a cost reduction of $400M over the 15 years of the contract ($43M per year until 2026 and $18M annually thereafter).
"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 Steer.
On condition that ALPA gives its agreement
Amendments to the capacity purchase contract between Air Canada and Jazz are, however, subject to the conclusion of an agreement between Jazz and the Air Line Pilots Association, International.
If this condition is met, the ACC will be modified retroactively to Jan. 1, 2021.
Thanks to Sky Regional
Michael Rousseau, President and CEO of Air Canada, expressed Air Canada's gratitude to Sky Regional, which has just lost the operation of regional services to Jazz.
"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," said Mr. Rousseau.