Yanking of Jazz Thomas Cook contract underscores ever-growing difficulty in regional airlines

A decision by travel package operator Thomas Cook to end a five-year charter agreement three years early with Canada's Jazz Aviation reflects the stark realities regional carriers face in attempting to meaningfully diversify their core business of providing feed to network legacy airlines.

While Thomas Cook ended the deal due to souring demand, it leaves Jazz again with just one client, Air Canada. Tensions between Jazz and Air Canada have flared over a dispute on rates paid to Jazz that could result in the regional carrier having to pay its partner CAD26 million (USD26.2 million) if an arbitrator later this year rules in Air Canada's favour.