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Chorus Aviation Inc. provided the following comment on Air Canada’s recent announcement regarding the discontinuation of service to certain regional markets:
Air Canada has announced the discontinuation of 30 regional routes, 21 of which are operated by Jazz Aviation LP, and the closure of eight stations at regional airports, all of which are managed by Jazz. Details of the route suspensions and station closures are provided in Air Canada’s news release.
“The COVID-19 crisis and provincial and federal government-imposed travel restrictions and border closures are having a significant negative effect on passenger demand for Canadian air travel,” commented Joe Randell, president and chief executive officer, Chorus. “I am saddened by the impact today’s announcement will have on our employees, suppliers and the affected communities, but respect and understand the difficult choice our partner, Air Canada, has had to make.”
Jazz and Air Canada are parties to a capacity purchase agreement with a term extending through the end of 2035. Under the CPA, Air Canada purchases substantially all of Jazz’s fleet capacity and pays certain fixed margin fees, performance incentives and compensation for operating costs (including aircraft lease rents) and makes all decisions with respect to marketing that capacity. Jazz’s compensation does not vary with flight activity and remains unchanged with this announcement.
