Air Canada’s imminent narrowbody renewal decision could provide opportunities for regional carrier Jazz Aviation, says Joseph Randell, president and chief executive of its parent company Chorus Aviation.
“We’re looking forward to Air Canada’s fleeting decisions as well because there could very well be additional opportunities in the larger aircraft size, and that’s the airplane size where we are most competitive,” says Randell, speaking at the Scotiabank Transportation and Aerospace conference in Toronto on 19 November. “And especially if at some point there were changes in terms of scope, in the future sometime, those are areas where we’re clearly able to deliver cost benefits to Air Canada."
The largest aircraft Jazz flies for Air Canada Express is the 75-seat Bombardier’s CRJ705 variant.
The 16-aircraft fleet typically flies routes such as Calgary-Houston and Toronto-Houston, says Randell. The next largest aircraft in its fleet is the 74-seat Bombardier Dash 8 Q400 turboprop, with the balance of its 130-aircraft fleet made up of Bombardier aircraft with up to 50 seats.
Air Canada is weighing multiple scenarios for replacing its older Airbus A320 and Embraer 190 aircraft, including aircraft from all four major manufacturers. The airline’s president and chief executive Calin Rovinescu told Flightglobal in June that the order could reach up to 90 aircraft. The airline says it is aiming to complete the deal by the end of the year but notes that it is not under any obligation to adhere to a set deadline.
Air Canada’s pilot contract permits regional operators to fly aircraft with up to 76 seats on its behalf, so moving any larger aircraft to the regional fleet would require an amendment to the pilot contract. That agreement is amendable from April 2016, however, the airline tells Flightglobal that it is possible to amend the language through a letter of understanding that pilots must ratify.
When asked about the possibility of opening up the scope clause at the Scotiabank conference, Rovinsecu says: “Until the current collective agreement is up with the pilot group, we couldn’t entertain something like that.”
But he adds that the carrier is taking this possible flexibility into account as it chooses aircraft to replace its narrowbodies, which will direct future scope discussions.
“There are some advantages to having a single narrowbody fleet in the mainline operation, so we’re looking at that possibility, as well as some real advantages about having some intermediate product between the 75 seat and the 140 seat,” says Rovinescu. “So we’re studying both scenarios as we look at the narrowbody decision and any subsequent discussion on scope would flow from that.”
Air Canada still depends on Jazz for a majority of its regional flying, however the cost-conscious airline has awarded some of its regional flying to other players after being afforded the ability to do this in is most recent pilot contract.
For example, it transitioned 15 Embraer 175 aircraft out of its mainline fleet to Montreal-based Sky Regional Airlines, making the 97-seat Embraer 190 the smallest aircraft type in its mainline fleet. The lower cost structure of the regional operation is expected to reduce the carrier's unit costs for the aircraft type by 11%, the carrier has said.
Air Canada is also in the midst of reviewing responses to a request for carriers to replace Jazz’s transborder flying in mid-2014, including both Canadian and US-based carriers. Despite this, Rovinescu praises Jazz for its on-time performance in the third quarter and says it is open to pursuing new opportunities with the carrier.