Canadian regional carrier Chorus Aviation has placed a firm order for 13 Bombardier Q400 turboprops worth $424 million after signing an amended capacity purchase agreement with mainline partner Air Canada.
The deal includes options to buy another 10 Q400s with a list price of $334 million.
The amended agreement with Canada calls for Chorus Aviation subsidiary Jazz Air to acquire all 23 78-seat Q400s to replace 34 37-seat Dash 8-100s and 25 50-seat CRJ200s over the next 11 years.
The agreement also mandates that Jazz Air will transition to a fleet mix of fewer, larger aircraft composed of Q400 turboprops and CRJ200 and CRJ705 regional jets.
Meanwhile, Chorus Aviation will establish a second airline subsidiary to operate an older fleet of Dash 8-100/300 turboprops.
This unit will be similar to Air Canada's Rouge as it will have its own workforce, Chorus says in a 2 February news release.
Overall, Chorus Aviation's new agreement with Air Canada shrinks the size of its seat capacity by 9% over the 11-year term.
Air Canada also will change the compensation structure for the regional feed provided by Chorus. The current arrangement compensates Chorus's cost and adds a 12.5% mark-up. The new deal, which is effective retroactively to 1 January, provides a fixed fee per aircraft regardless of that aircraft's usage.