Tag Archives: Jazz Aviation

Air Canada and Chorus Aviation finalize amended and extended Capacity Purchase Agreement for Jazz

Air Canada and Chorus Aviation Inc., parent company of Jazz Aviation LP, today confirmed that all conditions have been met and the previously announced amendment and extension of the Capacity Purchase Agreement (CPA) between Air Canada and Jazz has become effective.  As announced on January 14, 2019, the improved CPA is effective retroactively as of January 1, 2019 and extends to December 31, 2035.

As part of the agreement to amend the CPA, Air Canada has also completed the $97.26 million equity investment in Chorus previously announced on January 14, 2019. Air Canada has acquired 15,561,600 Class B Voting Shares in the capital of Chorus, representing approximately 9.99% of the issued and outstanding Class A Variable Voting Shares and Class B Voting Shares of Chorus on a combined basis.

Highlights of the CPA Amendment

  • With this amendment, the parties will effectively address increased domestic and international competition, changing market demand, and fluctuating fuel prices, through significant changes that will modernize and up-gauge the fleet.
  • In total, the 17-year contract will provide Jazz $2.5 billion in minimum contracted revenues, of which $1.6 billion, or 65%, will be generated from aircraft leasing revenue, supporting the continued transformation of Chorus’ business through the migration of CPA earnings to aircraft leasing. The amended CPA will provide for total incremental contracted revenue of $940 million; $310 million in fixed fees and $630 million in aircraft leasing under the CPA;
  • Projected annual savings to Air Canada of approximately $50 million in each of 2019 and 2020, and cumulative savings of approximately $53 million between 2021 and 2025, both as compared to the 2015 CPA frame-work (from both fixed fee and performance incentive reductions); Beyond 2025 – a market competitive fixed fee for the extension period. This supports Air Canada’s Cost Transformation Programs;
  • Chorus will secure preferred partner status on the operation of aircraft with up to 50 seats and Air Canada will consolidate its existing CRJ regional capacity into the Jazz operation;
  • Air Canada Deputy Chief Executive Officer and Chief Financial Officer, Michael Rousseau, will be appointed to the board of directors of Chorus.

In other news, Chorus Aviation Inc. has announced the pilots of its subsidiary, Jazz Aviation LP (‘Jazz’), have ratified the amendments to their collective agreement which was tentatively agreed on January 14, 2019. The Air Lines Pilots Association, International (‘ALPA’) represents Jazz’s pilots based in VancouverCalgaryToronto and Montreal.

Ratification of this tentative agreement was a condition of implementing the amendments to, and extension of, the capacity purchase agreement (‘CPA’) between Air Canada and Jazz, as announced on January 14, 2019. The amendment and extension of the CPA remains subject to completion of Air Canada’s $97.26 million equity investment in Chorus, which contains customary conditions to closing. Chorus anticipates closing the equity investment by no later than February 8, 2019, upon which the amendment and extension of the CPA will become effective.

The pending amendments to the CPA provide for a number of significant benefits including fleet modernization with the addition of 14 larger-gauge CRJ900 (76-seat) aircraft of which nine new aircraft will generate additional lease revenue under the CPA.

Air Canada will consolidate more of its overall regional capacity in the Jazz operation. Chorus will also secure preferred partner status on the operation of aircraft with up to 50 seats through a right to match third-party offers.  Additionally, an enhanced pilot mobility agreement will provide Jazz pilots access to careers at Air Canada. The amended CPA will ensure that Chorus and Air Canada are well positioned to respond as allies to an ever-changing industry.

Air Canada to launch new domestic western regional routes, Vancouver – Delhi route to become year-round

Air Canada Express-Jazz Aviation Bombardier DHC-8-402 (Q400) C-GGNW (msn 4388) YYC (Chris Sands). Image: 925782.

Air Canada has announced it will begin new domestic regional nonstop flights on July 2, 2018.

“We are pleased to offer new nonstop flights onboard our Bombardier Q400s between popular BC and Alberta cities as we continue to strategically expand our already extensive domestic network,” said Benjamin Smith, President, Passenger Airlines at Air Canada. “With the continued growth at several communities on Vancouver Island and in the BC Okanagan, we see the opportunity to add new nonstop services and provide additional convenient travel options.”

“With Alberta being such a key market, the new direct flights into Kelowna, Victoria and Comox are great news for British Columbia’s visitor economy,” said Walt Judas, CEO of the Tourism Industry Association of British Columbia. “Air Canada’scommitment to servicing these routes is not only a huge boost for the individual communities, it is also a major benefit for the Thompson Okanagan and Vancouver Island regions as a whole.”

Top Copyright Photo: Air Canada Express-Jazz Aviation Bombardier DHC-8-402 (Q400) C-GGNW (msn 4388) YYC (Chris Sands). Image: 925782.

Air Canada Express-Jazz Aviation aircraft slide show:

Route and frequency

Flight

Departs

Arrives

Edmonton-Kelowna – year-round

AC8395 YEG-YLW

Edmonton at 08:40

Kelowna at 08:59

AC8403 YEG-YLW

Edmonton at 16:05

Kelowna at 16:24

Kelowna-Edmonton – year-round

AC8394 YLW-YEG

Kelowna at 09:30

Edmonton at 11:51

AC8404 YLW-YEG

Kelowna at 16:55

Edmonton at 19:16

Edmonton-Victoria – seasonal

AC8095 YEG-YYJ

Edmonton at 08:40

Victoria at 09:40

AC8053 YEG-YYJ

Edmonton at 16:00

Victoria at 17:00

Victoria-Edmonton – seasonal

AC8086 YYJ-YEG

Victoria at 10:10

Edmonton at 12:55

AC8088 YYJ-YEG

Victoria at 17:30

Edmonton at 20:15

Calgary-Comox – seasonal

AC8362 YYC-YQQ

Calgary at 10:05

Comox at 10:58

AC8361 YQQ-YYC

Comox at 11:30

Calgary at 14:14

 

These new routes complement Air Canada’s previously announced new nonstop North America routes beginning 2018:

  • Toronto to: Omaha, Providence, Nanaimo, Kamloops
  • Montreal to: Baltimore, Pittsburgh, Victoria
  • Edmonton to: San Francisco
  • Vancouver to: Sacramento

Air Canada will launch new international services in 2018 including:

  • Toronto to: Shannon (Ireland), Porto (Portugal), Zagreb (Croatia), Bucharest (Romania), Buenos Aires (Argentina)
  • Montreal to: TokyoNarita (Japan), Dublin (Ireland), Bucharest (Romania), Lisbon (Portugal)
  • Vancouver to: Paris (France), Zurich (Switzerland)

In other news, Air Canada also announced that its current seasonal nonstop VancouverDelhi flights will become year-round starting June 8, 2018.

First Boeing 777-300 in the new livery

Above Copyright Photo: The first Boeing 777-300 has now been repainted in the new livery. Air Canada Boeing 777-333 ER C-FITL (msn 35256) YYZ (TMK Photography). Image: 940829.

Air Canada aircraft slide show:

Air Canada Express arrives in Austin, Texas

Air Canada Express logo-3

Air Canada Express (Jazz Aviation) (Halifax) yesterday (May 18) officially launched its first flight to Austin, Texas. With Air Canada Express flight AC 8840 from Toronto (Pearson), Austin officially became part of Air Canada’s international network of more than 190 destinations on five continents.

Jazz logo (Jazz)

Daily Air Canada Express flights from Toronto to Austin are operated by Jazz Aviation LP with 75-seat Bombardier CRJ705 aircraft with a choice of both premium and economy cabins of service.

New Air Canada and Air Canada Express routes launched to date this year in addition to Toronto-Austin include: Montreal-Venice, Vancouver-Osaka, Vancouver-Comox, Calgary-Halifax and Calgary-Nanaimo. Upcoming new routes still to launch include: Toronto-Dubai, Toronto-Delhi, Toronto-Amsterdam, Toronto-Atlantic City, Toronto-Abbotsford, Montreal-Mexico City and Calgary-Terrace.

Copyright Photo: TMK Photography/AirlinersGallery.com. Bombardier CRJ705 (CL-600-2D15) C-GOJZ (msn 15053) taxies at the Toronto (Pearson) hub.

Air Canada Express-Jazz aircraft slide show: AG Airline Slide Show

Air Canada Express-Jazz routes from Toronto (Pearson):

Air Canada Express-Jazz YYZ 5.2015 Route Map

Air Canada rouge and Air Canada Express add new routes

Air Canada (Montreal) on May 1 inaugurated new Air Canada rouge and Air Canada Express services between Vancouver-Osaka, Vancouver-Comox, Calgary-Nanaimo and Calgary-Halifax.

The up to five times weekly Vancouver-Osaka flights are operated by Air Canada rouge this summer with 280-seat Boeing 767-300 ER aircraft offering a choice of premium and economy cabins. Up to ten weekly, seasonal Halifax-Calgary flights are operated by Air Canada rouge with 136-seat Airbus A319 offering a choice of premium and economy cabins.

The daily Nanaimo-Calgary and twice daily Comox-Vancouver flights are operated by Jazz Aviation LP under the Air Canada Express brand with 74-seat Bombardier Q400 and 50-seat Bombardier DHC-8-300 aircraft respectively.

Upcoming new routes which will be launching by this summer’s peak include: Toronto-Amsterdam, Toronto-Austin, Toronto-Atlantic City, Toronto-Abbotsford, Montreal-Venice, Montreal-Mexico City and Calgary-Terrace.

Copyright Photo: TMK Photography/AirlinersGallery.com. Air Canada rouge (Air Canada) Boeing 767-333 ER WL C-GHLQ (msn 30846) taxies at the Toronto (Pearson) base.

Air Canada aircraft slide show: AG Airline Slide Show

Air Canada rouge aircraft slide show: AG Airline Slide Show

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Chorus Aviation (Jazz Aviation) to buy Voyageur Airways’ holding company

Chorus Aviation Inc. (Jazz Aviation) (Halifax) has announced that it has entered into an agreement to acquire all of the issued and outstanding shares of 519222 Ontario Limited, a holding company that owns Voyageur Airways (North Bay, Ontario) and its related companies, a leading provider of specialized aviation services with international operations.

Voyageur, a Transport Canada approved air operator, is an integrated provider of specialized aviation services, including contract flying operations both internationally and domestically, and offers advanced engineering and maintenance capabilities. Voyageur was founded almost 50 years ago in 1968, and is a private company headquartered at its 200,000 square foot facility in North Bay, Ontario. The company primarily operates within two aviation services sectors:

Specialized contract flying operations. The company operates medical, logistical and humanitarian flights serving blue chip clients comprised primarily of government entities and international non-governmental organizations. Voyageur has a total of 18 aircraft of which 13 are owned and 5 leased with the majority being Bombardier DHC-8-300 and CRJ200 aircraft. Voyageur currently operates in Canada, Africa and Central Asia.

Specialized engineering and advanced maintenance operations. As a certified Design Approval Organization by Transport Canada, the company has developed a number of Supplemental Type Certificates for modifications and improvements for Bombardier regional aircraft. The company is an ‘approved organization’ under Transport Canada, United States Federal Aviation Administration and European Aviation Safety Agency regulations. The company has full in-house design engineering and aircraft modification capabilities for special mission integration and support requirements along with parts sales and manufacturing. The company also has storage and parking capabilities for up to 65 regional aircraft at its North Bay facility.
Voyageur also operates a small fixed-base operation at the North Bay airport providing services such as aircraft fueling, ground handling and aircraft hangar and storage facilities.

The company has a track record of strong financial performance with solid revenue and consistent free cash flow generation. For the last fiscal year ended December 31, 2014, Voyageur generated adjusted EBITDA1 of approximately $16.9 million.

Transaction Details

The purchase price, on a cash free/debt free basis, represents a total enterprise value of approximately $80 million, subject to closing working capital adjustments. Utilizing cash on hand, $47.0 million will be paid at closing, along with the issuance of $8.0 million in Chorus Class B Voting Shares. Approximately, a further $25 million in deferred cash payments will be paid in separate installments over the 36 month period following the closing. The $80 million purchase price is supported by the appraised value of Voyageur’s owned aircraft, real estate and working capital.

The $80 million purchase price represents an attractive multiple of approximately 4.7 times 2014’s adjusted EBITDA1, and will be immediately accretive to Chorus’ consolidated earnings and free cash flow1. This transaction is expected to deliver a healthy return on investment to shareholders, and does not have a negative impact on the current dividend policy.

Closing of the transaction is expected to occur in the second quarter of 2015 and is subject to certain closing conditions, including receipt of TSX, regulatory and other third party approvals, and completion of certain remaining due diligence.

Headquartered in Halifax, Nova Scotia, Chorus was incorporated on September 27, 2010 and is a dividend-paying holding company with various interests including Jazz Aviation Holdings Inc. and Chorus Aviation Holdings II Inc. Chorus Aviation Holdings II Inc. is a holding company to facilitate diversification of Chorus’ business.

Copyright Photo: TMK Photography/AirlinersGallery.com. De Havilland Canada DHC-7-102 Dash 7 C-GLOL (msn 39) arrives at Toronto (Pearson). Since this photo, the aircraft has been operating for the United Nations in Africa.

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Air Canada to launch flights to Atlantic City

Air Canada (Montreal) has announced it is launching nonstop service between its Toronto Pearson hub and Atlantic City, New Jersey. The seasonal service, to be flown by Air Canada Express, operated by Jazz Aviation (Halifax), will offer four roundtrips trips a week beginning May 22, 2015.

Air Canada’s service between Toronto Pearson and Atlantic City International Airport will be operated four days a week from May 22 to September 7, 2015, using a 74-seat Bombardier DHC-8-402 (Q400) aircraft.

Copyright Photo: Keith Burton/AirlinersGallery.com. Bombardier DHC-8-402 (marketed as the Q400) C-GGND (msn 4394) arrives at the Toronto (Pearson) hub.

Air Canada Express-Jazz Aviation aircraft slide show: AG Airline Slide Show

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Air Canada extends the CPA with Chorus Aviation (Jazz Aviation), orders 13 additional Bombardier Q400s

Air Canada (Montreal) said today that its amended and extended capacity purchase agreement (CPA) with Chorus Aviation Inc., parent company of Jazz Aviation LP (Halifax), has been concluded with all terms and conditions now met. The agreement provides both parties with greater stability and significant cost reductions through a better alignment of their interests.

The airline continued:

Air Canada estimates the new agreement will result in approximately $550 million in financial value over the next six years as compared to the previous CPA, of which two-thirds will be in network optimization benefits. The remaining benefits will be spread across several cost areas. Annual benefits in 2015 are expected to increase operating income by approximately $50 million as Air Canada implements the new CPA, increasing each year throughout the following five years.

The agreement also provides for long-term stability by eliminating the risks, uncertainties and set-up costs of a potential transition to alternative regional providers in 2021. Post 2020, Air Canada expects Jazz will provide competitive costs and continued high service levels.

The highlights of the new CPA include:

Extension of the term by five years to December 31, 2025;

Establishment of a pilot mobility agreement that provides Jazz pilots with access to pilot vacancies at Air Canada, thus allowing a significant reduction in Jazz operating costs;

Simplification and modernization of the Jazz fleet which will provide improved service and greater efficiency through the addition of 23 Bombardier Q400 aircraft;

Reduction in Air Canada and Jazz costs derived from a combination of improved fleet economics, greater network flexibility and reduced operating and labour costs. This supports Air Canada’s cost reduction initiatives; and

Modification of Jazz’s CPA fee structure, moving from a “cost plus” mark-up to a more industry standard fixed fee compensation structure. This will provide more cost certainty and better align the cost reduction goals of both Air Canada and Jazz. This eliminates non-value added costs and the necessity of the 2015 benchmarking exercise.

As a result,  Bombardier Commercial Aircraft and Chorus Aviation Inc., parent company of Jazz Aviation LP announced today that they have signed a firm purchase agreement whereby Chorus will acquire 13 Q400 NextGen aircraft and options for 10 Q400 NextGen aircraft. Once delivered, the aircraft will be operated by Jazz under the Air Canada Express banner.

The Companies also announced Chorus and Jazz as the launch customer and operator for the industry’s first Dash 8-300 aircraft Extended Service Program that will extend the life of the Dash 8-300 turboprop to 120,000 flight cycles from the original 80,000 flight cycles.

Copyright Photo: TMK Photography/AirlinersGallery.com. Jazz Aviation’s Bombardier DHC-8-402 (marketed as the Q400) C-GGOI (msn 4381) arrives in Toronto (Pearson).

Air Canada aircraft slide show:

Air Canada Express-Jazz aircraft slide show:

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