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Air Canada awards Air Georgian cross border routes

Dec. 10, 2013, Montreal - Air Canada announced Tuesday it would be expanding its relationship with Air Georgian by awarding its regional affiliate a new contract to start flying several of its U.S. cross border routes currently operated by Chorus Aviation Inc.


December 10, 2013
By The Financial Post

The Mississauga-based Air Georgian has been one of Air Canada’s
smaller regional affiliate for the past 13 years. But Air Georgian
recently announced its plans to merge its operations with Calgary’s
Regional 1 Airlines, a subsidiary of Avmax Group. Inc., to expand its
reach into the West.

 

Air Georgian said it would operate a fleet of Bombardier regional jets on the routes starting in mid-2014.

 

“We are excited with this opportunity to expand Air Georgian’s
presence as an Air Canada Express regional operator beginning in 2014,”
said Eric Edmondson, Air Georgian president, announcing the move.

Mr. Edmondson would not comment on the size of regional jet that would
be used on the routes. But said they would be owned within his company’s
corporate structure.

The decision by Air Canada to put the regional U.S. cross border
routes out for tender earlier this year is part of the airline’s efforts
to reduce costs.

 

Chorus Aviation, the parent company of Jazz, previously operated those routes, but was not invited to bid on the routes.

 

Air Canada’s management has said publicly that it believes Chorus’
costs are too high, and has been awarding new work to other low-cost
competitors, including Sky Regional Airlines and now Air Georgian.

 

The decision comes on the same day Chorus announced
it would be increasing its annual dividend to shareholders by 50% to
45¢ a share after winning its protracted rate dispute with Air Canada
last month.

 

“The competitive bid process generated a significant level of
response from a number of Canadian and U.S. regional operators.
Following a thorough evaluation of proposals received, Air Georgian was
selected on the basis of a broad range of criteria including operational
safety, efficiency, cost and service,” said Kevin Howlett, Air Canada
senior vice president of regional markets, in a statement. “The award of
additional flying to Air Georgian is an important step in our regional
airline diversification strategy and ongoing cost transformation
program.”