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Chorus orders up to 23 Q400s, announces second airline

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.

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Bombardier

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.

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