HALIFAX - Jazz Air (TSX:JAZ.UN) is cutting 270 employees as the regional airline operator reduces capacity by five per cent.

The Jazz reduction announced Thursday follows the mid-June move by Air Canada, from which Jazz was spun off and which buys most of its fleet capacity, to cut its flying by seven per cent with the loss of 2,000 jobs.

"The decrease in Air Canada's need for Jazz's services necessitates a reduction in staff of approximately 270 Jazz employees,'' the regional operator stated.

Jazz CEO Joseph Randell added that "every effort is being made to mitigate these job losses, and we hope this downturn in our industry's cycle ends soon. We are in a period of great uncertainty and cannot predict where the price of fuel is going.''

Jazz has already made fuel-saving changes and recently froze hiring and non-critical overtime. It also has announced plans to close its Hamilton operation at the end of July, eliminating 10 daily flights and 14 jobs at the Hamilton airport.

In Thursday's announcement, Jazz commented that "in addition to soaring fuel prices, airlines in Canada must also contend with federal and provincial fuel excise taxes, security fees, Nav Canada fees and airport charges that rank amongst the most expensive in the world. It is important to recognize the severity of the situation facing the entire aviation industry and ultimately our communities.''

In early trading on the Toronto Stock Exchange on Thursday, Jazz Air units fell 21 cents to $5.02, a drop of four per cent.