What Is A Capacity Purchase Agreement

“What we`re seeing is that in Europe, it`s gradually moving towards a MORE AMERICAN model with longer-term capacity purchase agreements. For us, we would like this model to really prevail in Europe. “We are very pleased to have reached this win-win agreement with Jazz and Chorus, which gives us long-term stability, greater competitive cost certainty and the flexibility to modernize the regional fleet for the benefit of our customers.” The changes will allow us to offer regional services in a more cost-effective manner so that we can compete more effectively by deploying the aircraft best suited to a particular regional market and generating additional traffic to serve our international network,” said Calin Rovinescu, President and Chief Executive Officer of Air Canada. “Further evidence of Air Canada`s commitment to a successful, long-term partnership, we will invest $97.26 million in Chorus following the effectiveness of the PCA changes. In addition to aligning our common interests, we believe this represents exceptional value for Air Canada shareholders. MONTREAL, Jan. 14, 2019 /CNW Telbec/ – Air Canada today announced an agreement to amend and extend the Capacity Purchase Agreement (CPA) with Jazz Aviation LP, a wholly-owned subsidiary of Chorus Aviation Inc., under which Jazz currently operates certain Air Canada Express regional flights. The changes were intended to provide Chorus with long-term stability, confirm Jazz as Air Canada`s largest express airline in the future, and enable the growth of Chorus` leasing business through Air Canada`s equity investment and the predictability of Jazz`s cash flows from LPC`s operations through 2035. The changes will strengthen the strength and competitiveness of the Air Canada Express brand and its regional network from coast to coast to coast, allowing Air Canada to achieve significant CPA savings while maximizing network and fleet flexibility compared to the current agreement.

“Things are changing. We have found that with SAS and LOT, they are increasingly open to longer-term contracts. This gives us and our owners a little more security. Ultimately, we want to see a situation like North America with longer-term contracts over a decade or more. This would then allow us to think about purchasing decisions; we could go directly to the OEM and completely remove the lessors. Capacity purchase contracts are a big deal in the United States. They ensure that regional routes work for large airlines, creating the risk of operating regional routes and allowing for a higher degree of flexibility. .