Air Canada has passed all 15 of its E-175 aircraft to Sky Regional, which will operate them on behalf of Air Canada under a capacity purchase agreement. The two have partnered since May 2011 on services between Billy Bishop Toronto City Airport and Montreal Trudeau Airport with a fleet of Dash 8 Q400s. With this agreement, Sky Regional now operates 20 aircraft on behalf of Air Canada. “This is an important step both in Air Canada's regional carrier diversification strategy and our on-going cost transformation programme, given that Sky Regional's cost structure is more in keeping with that of the US regional carriers,” commented Calin Rovinescu, president and CEO of Air Canada. “It allows Air Canada to reduce the cost of its regional lift and thereby to better compete in the rapidly evolving North American regional markets as low cost operators continue to grow, both in Canada and the United States."