Regionals Update: Jazz concessions raise anxiety in other sectors

 - July 30, 2008, 9:12 AM

Last month’s ratification of a cost-cutting deal by the 1,400 pilots of Air Canada Jazz could set the country’s regional airline industry on an entirely new course if management succeeds with a reorganization plan centered on a broader scope of operation for the Air Canada regional subsidiary. Although the deal calls for “significant” cost savings through productivity improvements and a new status pay system, it also gives the regional pilots the right to fly Air Canada airplanes certified to carry 75 seats or less. They also won the right to bid against the mainline pilots for aircraft holding up to 110 seats. Although the union representative for Air Canada’s pilots, the Air Canada Pilots Association, called the agreement “unacceptable,” the mainline pilots’ union met a June 1 deadline to reach a tentative deal of its own to avert a court-ordered liquidation of the bankrupt national carrier.

While the deal hardly sat well with Air Canada’s mainline pilots, another perhaps less visible aspect of the airline’s restructuring plan could also spell trouble for third-tier independent airlines flying 19-seat turboprops under contract for the major airline. Under the plan, Air Canada Jazz would return to flying 19-seat turboprops, perhaps as many as 32 Beech 1900s by 2009. Independent airlines Central Mountain Air, Air Labrador and Air Georgian now provide connections for Air Canada under capacity-purchase agreements.