Canada's Chorus Aviation has lost a contract to run Thomas Cook flights from Canada three years before the contract ends because Thomas Cook is seeking more operating flexibility.
Under a flight services agreement signed in 2010, Chorus's Jazz Aviation leased a fleet of six Thomas Cook Boeing 757-200 aircraft, and a Jazz crew flew them between Canada and several holiday spots from November to April.
The deal was meant to continue for three more years, but will now wind down by the end of this month.
Thomas Cook performed poorly in 2011, especially in Britain where its core customer base of families with young children has been particularly affected by the economic downturn. The 170-year-old travel group secured a GBP£200 million (USD$317.70 million) rescue package from lenders in November.
"A change in market dynamics means that we need to introduce more flexible flying arrangements; the consequence of that is the decision to discontinue our dedicated fleet of 757 aircraft," Dean Moore, chief executive of Thomas Cook North America, said in a release issued by Chorus.
Chorus, which also operates regional flights for Air Canada under the Air Canada Express brand, said it had reached a settlement with Thomas Cook "regarding the recovery of certain initial start-up costs and forgone revenues," but that precise terms are confidential.