Canadian airline operator Chorus Aviation Inc (TSX: CHR.B) said it has received confirmation that a decision in the arbitration relating to the benchmarking provisions in a capacity purchase agreement with Canada´s flag carrier Air Canada will not result in changes to the controllable cost mark-up that Jazz Aviation LP receives from Air Canada.
According to the firm, a majority of the arbitration panel agreed with its Jazz uni tthat there is no justification to change the current 12.5% mark-up, and therefore, Jazz has no obligation to pay retroactive amounts to Air Canada.
All other contractual provisions of the CPA are unchanged and will continue to provide clarity on Jazz´s revenues going forward.
Chorus said it remains focused on prudently managing its financial resources with the goal of enhancing value for all stakeholders, including Air Canada and its passengers.
As such, the Chorus board of directors and management team continuously review their capital allocation strategy, seeking to maintain an appropriate balance between reducing debt, investing in the business and returning capital to shareholders.
Chorus Aviation Inc. was incorporated on September 27, 2010 and is a dividend-paying holding company which owns Jazz Aviation LP and Chorus Leasing III Inc.
Jazz Aviation has a history in Canadian aviation with its roots going back to the 1930s, and is the largest regional carrier in Canada.
The company operates more flights and flies to more Canadian destinations than any other carrier and has a workforce of approximately 4,450 professionals highly experienced in the challenging and complex nature of regional operations.
Under a capacity purchase agreement with Air Canada, Jazz provides service to and from lower-density markets as well as higher-density markets at off-peak times throughout Canada and to and from certain destinations in the United States.
Find out more at www.flyjazz.ca.