Air Canada is restructuring its commercial relationship with regional subsidiary Air Canada Jazz, dropping the established revenue-sharing arrangement in favour of the capacity purchase mode favoured by US airlines.
The change comes into effect on 1 August and will cut costs, as well as improve capacity and schedule planning, says Air Canada.
Air Canada Jazz will be paid per flight to operate on behalf of Air Canada, which will assume responsibility for scheduling, pricing and network planning. Under the current agreement, revenue from passengers travelling on both airlines is shared between the carriers. The capacity purchase model has given US airlines greater flexibility in adapting to market changes by giving them more control over their regional affiliates. Restructuring could also make it easier for Air Canada to sell the unit.
The former Air Canada Regional was renamed after completing the consolidation of AirBC, Air Nova, Air Ontario and Canadian Regional Airlines. The carrier has rationalised its route network and is simplifying its fleet, with its Fokker F28s to be retired by year-end.
Some of the F28s are being replaced by Bombardier CRJ200s. Air Canada Jazz also has 10 BAe 146-200s, 86 Bombardier Dash 8s and five Raytheon Beech 1900Ds.
Source: Flight International
