Pact Hinges In Part On Deal With Pilot Union

A agreement on an amended and extended capacity purchase agreement (CPA) has been reached between Air Canada and Jazz Aviation LP.

The agreement provides for significant cost reductions for both parties, strengthens the relationship and better aligns their interests over the long term. The new CPA is subject to a number of terms and conditions, including the ratification of a new tentative agreement reached between Jazz and its pilots, represented by the Air Line Pilots Association ('ALPA'), and approvals by the respective Boards.

"Our restructured capacity purchase agreement with Jazz represents another important milestone in Air Canada's ongoing cost reduction initiatives and the execution of our commercial strategy," said Calin Rovinescu, President and Chief Executive Officer of Air Canada. "The agreement better aligns the interests of both companies and the resulting fleet, operational and cost efficiencies will allow Air Canada to compete more effectively in regional markets, improve our product and service offerings and generate connecting traffic to support our growing international network."

"We are pleased to have reached new agreements that strengthen our competitive position in regional markets and our relationship with Air Canada for the long term," remarked Joe Randell, President and Chief Executive Officer, Jazz and Chorus Aviation Inc. "We are aligned with Air Canada in terms of cost reduction and operational efficiency gains. While we have made significant progress in our cost reduction efforts, this improved contract will allow us to further address our cost challenges.  I'm confident we will deliver additional value to our stakeholders as there is certainty of Jazz's operations for the next eleven years, and it places Jazz in a more cost competitive position over the longer term. This confidence is shared by Air Canada with the elimination of any future benchmarking process over the term of the contract. The projected economics of the new contract are anticipated to support the Chorus dividend and the long term sustainability of Jazz."

"I would like to thank the bargaining teams for forging a new pathway forward with Jazz and Air Canada," said Captain Claude Buraglia, Chairman, Master Executive Council, Air Line Pilots Association.  "This long term labour agreement provides competitive terms and secures Jazz's leading position within the Air Canada network, which will provide certainty for our pilots.  This clearly demonstrates the innovative spirit of our pilot group and sets the foundation for a renewed relationship that will benefit all stakeholders."

FMI: http://chorusaviation.ca/