CPA (Capacity Purchase Agreement) as I understand it is a bit like a franchise agreement in a different dress, slightly different dynamic in corporate structure etc. but essentially the same thing where a large network carrier (eg BA) Buys x amount of capacity from another corporate entity but maintains control over certain, if not all aspects of the operation.
Expressjet in the US provides regional services to Continental mainline through a Capacity Purchase Agreement, but as I see it it's just another buzz word for a franchise agreement...........
Leviathan
Not so. There is a
very big difference: who takes the commercial risk? Who'll lose money if a route flops (or who'll make it if it's a winner)?
In a franchise agreement, the franchisee (the little guy) takes that risk: will this be a good route to launch? What fare levels should I set? Can I get a high enough yield? How often should I fly the route?
In a CPA (at least the traditional US-style Capacity Purchase Agreements), the major carrier defines what capacity/frequency they want on which routes, so the regional carrier has a more-or-less guaranteed revenue stream with relatively little risk (OK, the major could go bankrupt, but otherwise...) Thus it almost resembles a PSO route more than a franchise.
A good overview of US-style CPAs is
here
The message seems to be that the era of cushy CPA deals in the US is coming to an end, so the US regional carriers have to look elsewhere. As Virginblue mentioned earlier, Expressjet has announced the establishment of "Expressjet Europe" and is looking for customers among the European majors. (They claim to be able to deliver great economies of scale because of their US ERJ operation - but given that they'd be flying JAA/EASA-certified aircraft in Europe, and potentially wouldn't even be flying ERJ135/145s at all, it's not clear to me how attractive their proposition is.)
But this may be academic based on tomorrow's news...
C.