Chorus Aviation saw a C$2.3 million ($2.3 million) increase in aircraft maintenance expenses in the second quarter of 2012 compared to the same period a year earlier, on foreign exchange and increased block hours.
The Halifax, Nova Scotia-based parent of Jazz says that the increase was due to US exchange rate, increased block hours and other types of maintenance costs but that it expects maintenance costs to decrease as its fleet becomes younger, in a statement.
These expenses were offset by a C$2 million decrease in engine maintenance costs during the second quarter compared to 2011 because it has replaced Bombardier CRJ100 regional jets with new Q400 turboprops.
Jazz currently operates four heavy maintenance lines, with two in Halifax and two in London, Ontario. The carrier will close one of the lines in Ontario and consolidate the remaining three into a new building in Halifax by the third quarter of 2013.
The carrier says that the maintenance drawdown is a result of adding new younger aircraft to its fleet, which in turn leads to lower heavy maintenance requirements.
"By increasing the number of newer aircraft in the Jazz fleet, the requirement for heavy maintenance work is reduced," says Chorus president and chief executive Joseph Randell. "While we recognise the impact of this decision is difficult for a number of our employees - it is the right direction to take if we are to become more cost competitive and remain relevant in this industry as the competitive landscape continues to change."
Jazz currently has 15 Q400s in its fleet, as well as 11 Bombardier CRJ100s and 26 CRJ200s, according to a stock exchange filing. It converted opetions for six Q400s to firm orders at the Farnborough air show in July, which will be delivered between February and April 2013.