Jazz Aviation LP had received the decision in the arbitration relating to the benchmarking provisions within its Capacity Purchase Agreement with Air Canada to compare the rate of growth of Jazz's controllable costs to those of a specified group of comparable operators.
HALIFAX – Chorus Aviation Inc. announced that Jazz Aviation LP had received the decision in the arbitration relating to the benchmarking provisions within its Capacity Purchase Agreement (CPA) with Air Canada to compare the rate of growth of Jazz’s controllable costs to those of a specified group of comparable operators. The three-member arbitration panel, with one member dissenting, concluded the component unit cost driver (CUCD) put forward by Air Canada is the appropriate methodology. However, the arbitration panel also agreed certain controllable cost adjustments have been made in Jazz’s favour.
Jazz availed of the arbitration panel’s offer and sought clarification on a number of other issues. The panel clarified that additional adjustments put forward by Jazz to achieve a reasonable comparison in the arbitration were determined to be appropriate. The panel also concluded that another requested adjustment by Jazz requires further negotiations between Air Canada and Jazz, failing which, the parties will submit new proposals and analysis to the panel. As a consequence, the impact, if any, to the mark-up on Jazz’s controllable costs cannot be stated at this time with reasonable certainty. Chorus will provide further information as soon as possible.
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