Citing the devastating impact of the pandemic on aviation, Air Canada says it has reached a deal that will see Chorus Aviation Ltd.’s Jazz Aviation subsidiary become the sole operator of Air Canada Express flights.

The change means Air Canada will transfer operation of its Embraer E175 fleet to Jazz from Sky Regional.

Air Canada says it is consolidating its regional flying with Jazz due to the need to reduce costs with an expected $400 million in savings over the 15-year term of the agreement plus an additional $193 million in capital expenditures avoided.

“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,” said Richard Steer, Sr. VP President, Operations and Express Carriers.”

The changes to the capacity purchase agreement with Jazz are subject to Jazz reaching an agreement with the Air Line Pilots Association, International.