Jazz Aviation will take over all of Air Canada Express regional flights while also retiring its Dash 8-300 aircraft, in what is described as a Canadian aviation industry consolidation. With air service to the Canadian Atlantic region already slashed due to travel restrictions, Jazz is takings.

Simultaneously, Chorus Aviation subsidiary Jazz will replace its fleet of smaller planes in favor of larger capacity regional jets. This may mean that some smaller communities currently served by Air Canada Express could see a reduced number of flights. Yesterday's announcement is part of a revised Capacity Purchase Agreement (CPA) with Chorus Aviation that Air Canada claims will save the national flag carrier $400 million over 15 years.

Jazz will get 25 Embraer 175 regional jets

The Air Canada announcement states that Chorus will become the sole operator of Air Canada Express and its fleet of 25 Embraer 175 regional jets. All revisions to the CPA are dependent on Jazz reaching an agreement with the Air Line Pilots Association. If agreed, the CPA will be retroactive, beginning January 1, 2021.

Richard Steer, Senior Vice President, Operations and Express Carriers commented on the development, saying,

"Air Canada is consolidating its regional flying with Jazz in response to the ongoing devastating impact of COVID-19 upon the airline industry. This necessary realignment of our regional services will help Air Canada achieve efficiencies and reduce operating costs and cash burn by consolidating its regional operations with one provider.

"Moreover, by streamlining the regional fleet, this agreement will also position Air Canada to operate more competitively with a single provider as traffic returns following the pandemic."

Air Canada will cut ties with Sky Regional

Air Canada and Jazz's revised agreement means that Air Canada will sever relations with Ontario-based Sky Regional. When speaking about this in a statement, President and Chief Executive Officer of Air Canada Michael Rousseau, said,

"Sky Regional has provided excellent service to Air Canada and its passengers over the past decade with an impeccable safety record and excellent on-time performance and cost management. We thank Sky and all of its employees for their effort, dedication, and valued partnership."

The decision to allow Jazz to take over Air Canada Express flights could have a huge impact on some of the region's smaller communities. When speaking about the effect the pandemic has already had on regional flights, Atlantic Canada Airports Association Monette Pasher said,

"We're always concerned to see 50-seat aircraft exit the market. This is something that was happening pre-pandemic, as well, but now we seem to be seeing it at an accelerated pace.

"I think post-pandemic, the reality of air travel is going to be quite different. And we might see larger planes and a lot less frequency."

More consolidations could happen

When asked by CBC News if Chorus Aviation would like to comment on the deal, the airline declined, saying it would prefer to wait until it had reached a deal with the union representing its pilots.

Given the huge downturn in business and little support from the Canadian government to help keep air lifelines open to smaller communities, it is no surprise that we see this sort of inter-industry agreement.

Do you think that we will see more of these types of agreements in North America? If so, which airlines do you see consolidating?