HALIFAX, Jul 3, 2008 (Canada NewsWire via COMTEX News Network) -- Today, Jazz Air LP ("Jazz") announced that it has implemented a number of cost-saving initiatives and is taking additional measures to combat rising fuel costs.
Air Canada, Jazz's primary customer, announced on June 17, 2008, that it would reduce network domestic and transborder capacity by 2% and 13% respectively with the implementation of the fourth quarter 2008 and first quarter 2009 schedules. As a result, Jazz's flying will be reduced by approximately 5%.
The decrease in Air Canada's need for Jazz's services necessitates a reduction in staff of approximately 270 Jazz employees.
"These are difficult times for our industry and the decision to reduce our workforce was not reached lightly; it is with sadness that we'll see some of our employees leave our company", said Joseph Randell, President and Chief Executive Officer, Jazz. "We've grown very strong as a team and have overcome many difficult challenges over the past number of years. Every effort is being made to mitigate these job losses, and we hope this downturn in our industry's cycle ends soon. We are in a period of great uncertainty and cannot predict where the price of fuel is going. We have taken immediate action to better match our resources with our new revenue levels. While Jazz is already a lean organization and is in a reasonable position to manage its current challenges, every effort is being made to reduce our costs and to prepare for what may lie ahead."
Jazz has already established a number of fuel-saving initiatives, recently froze all hiring and non-critical staff overtime, and instituted a number of other cost-saving programs. Being a Six Sigma organization has made Jazz a more efficient airline and the focus to ensure we remain competitive is constant.
Airlines are currently operating in a very high-cost environment worldwide. In addition to soaring fuel prices, airlines in Canada must also contend with federal and provincial fuel excise taxes, security fees, NavCanada fees and airport charges that rank amongst the most expensive in the world. It is important to recognize the severity of the situation facing the entire aviation industry and ultimately our communities. All industry partners should make every effort to operate as efficiently as possible without compromising safety.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this news release may contain statements which are forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and other uncertain events. Forward-looking statements, by their nature, are based on assumptions, including those described below, and are subject to important risks and uncertainties. Any forecasts or forward-looking predictions or statements cannot be relied upon due to, amongst other things, changing external events and general uncertainties of the business. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to differ materially from those expressed in the forward-looking statements. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, energy prices, general industry, market and economic conditions, competition, insurance issues and costs, supply issues, war, terrorist attacks, epidemic diseases, changes in demand due to the seasonal nature of the business, the ability to reduce operating costs and employee counts, employee relations, labour negotiations or disputes, restructuring, pension issues, currency exchange and interest rates, changes in laws, adverse regulatory developments or proceedings, pending and future litigation and actions by third parties, as well as the factors identified in the Risk Factors section of Jazz Air LP's and Jazz Air Income Fund's restated annual MD&A dated February 19, 2008, and interim MD&A dated May 7, 2008. The forward-looking statements contained in this discussion represent Jazz's expectations as of July 3, 2008, and are subject to change after such date. However, Jazz disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
Jazz is the second largest airline in Canada based on fleet size and the number of routes operated. Jazz operates more flights and flies to more Canadian destinations than any other Canadian carrier. Jazz forms an integral part of Air Canada's domestic and transborder market presence and strategy. Jazz is owned by Jazz Air Income Fund (TSX: JAZ.UN).
Jazz is not a typical airline. The airline has a commercial agreement with Air Canada that is the core of its business. Under the Capacity Purchase Agreement (CPA), Air Canada currently purchases substantially all of Jazz's fleet capacity based on predetermined rates. The CPA provides commercial flexibility, low trip costs and connecting network traffic to Air Canada. Also, the CPA reduces Jazz's financial and business risks, and provides a stable foundation for day-to-day operations and future growth.
About Jazz Air Income Fund
Jazz Air Income Fund is an unincorporated, open-ended trust established under the laws of the Province of Ontario, created to indirectly acquire and hold an interest in the outstanding limited partnership units of Jazz Air LP.
SOURCE: JAZZ AIR INCOME FUND
SOURCE: AIR CANADA JAZZ
Media Contact: Manon Stuart, (902) 873-5054 Halifax, www.flyjazz.ca