Jazz Aviation LP is losing its contract to operate charter flights on behalf of Thomas Cook Canada Inc. after only two years.
"The remaining three years of the five-year flight services agreement with Jazz will be terminated effective April 30," Jazz said Friday.
Halifax-based Jazz, a unit of Chorus Aviation Inc. , also flies regional routes on behalf of Air Canada but those services are separate from the contract with leisure travel firm Thomas Cook.
That contract, signed two years ago, allowed Jazz to expand into leisure markets such as Mexico. Thomas Cook had to find replacement flights for its Sunquest Vacations unit after charter company Skyservice Airlines Inc. went into receivership.
The Canadian tour operator's debt-laden parent company in Britain has been struggling. "A change in market dynamics" led to the early contract cancellation with Jazz, said Dean Moore, chief executive officer of Thomas Cook North America.
Jazz has been flying a charter fleet of six Boeing 757-200s to sun destinations during the winter charter season. "We are very disappointed that the current market conditions require Thomas Cook to restructure its operations," Jazz CEO Joseph Randell said in a statement.
RBC Dominion Securities Inc. analyst Walter Spracklin said lower-cost WestJet Airlines Ltd. could be in a position to pick up some work from Thomas Cook, if the tour operator forges ahead next winter.