Chorus Aviation Inc. (ticker: CHR_A.TO, exchange: Toronto Stock Exchange (.TO))
News Release -
Air Canada Jazz forced to delay the reinstatment of service at Toronto City Centre Airport due to the Toronto Port Authority
HALIFAX, Aug. 8 /CNW/ - Air Canada Jazz has been forced to delay plans to reinstate scheduled service on August 28, 2006, at the Toronto City Centre Airport due to the intransigent actions of the Toronto Port Authority (TPA). The TPA has refused to approve the sublease between Jazz and Stolport Corporation, thereby preventing Jazz from securing facilities from which to operate. The TPA has refused to allow Jazz to reinstate service at the airport unless it agrees to a secret commercially restrictive commercial carrier operating agreement (CCOA). Jazz regrets having to take this action and the inconvenience caused to its customers.
For the last sixteen years, Jazz has operated at the Toronto City Centre Airport under a CCOA that was signed in 1990 and renewed in 1995. Though by its terms, it would have expired in 2000, Jazz and the TPA had been operating under the same agreement until Jazz was forced to suspend service on February 28, 2006. The TPA unilaterally contends that the Agreement will terminate on August 31, 2006. From a regulatory perspective, a CCOA is not necessary to establish scheduled service at a Canadian airport. In fact, Jazz operates to 56 airports throughout Canada where the vast majority do not have a requirement for an operating agreement or a CCOA, and not one seeks to impose confidential commercial restrictions like those required by the TPA.
"We have repeatedly told the TPA that we'll not stand victim to the commercial regulation and limitations they seek to impose on our operations at the Toronto City Centre Airport," said Joe Randell, President and Chief Executive Officer, Air Canada Jazz. "The conditions the TPA seeks to impose through the proposed CCOA violate the TPA's legal obligations under Section 50(1) of the Canada Marine Act, and are well outside the norms of the aviation industry. In the interests of accountability and transparency, Jazz calls on the TPA to lift the shroud of secrecy it has imposed on the CCOA and make the agreement public. "
Jazz's services were temporarily suspended on February 28, 2006 when it received a termination notice from its landlord, City Centre Aviation Limited. At that time, Jazz repeatedly appealed to the TPA for assistance and none was provided. This is unlike other airports which seek not only to retain but also to promote and grow services. In July, Jazz was successful in securing new facilities from Stolport Corporation and based on that arrangement had announced on July 6, 2006, that it would resume and enhance its service from the Toronto City Centre Airport on August 28, 2006. The TPA has since refused to approve Stolport's sublease of space to Jazz to allow for the restart of service.
"The actions of the TPA breach its obligations under federal law, and are so contrary to industry practice that they were virtually inconceivable when we announced the recommencement of services on July 6th," Mr. Randell added. "Here we have the unprecedented situation where a long-term operator is having to do battle with the management of an airport simply to resume a longstanding service and remain its customer. It is obvious that by denying Jazz fair and equal access to these public facilities, the TPA has decided to create a virtual monopoly on behalf of a single corporate interest. In fact, by the TPA's own admission in a letter publicly released on July 26, 2006, the Authority has entered into an agreement with another airline which limits the activity of carriers at Toronto City Centre Airport except one."
As a result of today's announcement, customers are no longer able to purchase seats on this service, and Air Canada and Jazz are taking the necessary steps to ensure that those customers who have already booked their travel are given the option to fly from an alternate location, Pearson International Airport. Customers who have booked service to and from the Toronto City Center Airport as of August 28, 2006 may also obtain a full refund.
"We sincerely apologize to our loyal customers and our dedicated employees who have put their support behind the reinstatement of this service," said Mr. Randell. "Jazz will continue to pursue this matter through all appropriate avenues, including through the courts, and remains committed to returning to the Toronto City Centre Airport as soon as possible."