Tag: Chorus Aviation

Chorus Aviation announces a sale-leaseback transaction with IndiGo, for six new ATR72-600 aircraft

Provided by Chorus Aviation Inc/CNW

Third-party leased aircraft fleet commitments reach US $1.1 billion

Delivering regional aviation to the world

HALIFAX, June 13, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) announced today that Chorus Aviation Capital (‘CAC’) has entered into agreements to deliver six new ATR72-600 aircraft to InterGlobe Aviation Limited (‘IndiGo’) of India under a sale and leaseback transaction. Deliveries are anticipated in the second and third quarters of 2019.

“We are delighted to welcome IndiGo, as our 14th lease customer,” said Steve Ridolfi, President, Chorus Aviation Capital. “The Indian aviation market is vibrant and dynamic with regional air transportation expanding rapidly to connect previously unserved communities. IndiGo is perfectly positioned to capitalize on this exciting growth. This is Chorus Aviation Capital’s second leasing transaction this year in India, one of the world’s fastest growing aviation markets.”

“We’re maturing and building scale as a worldwide regional aircraft lessor through the addition of yet another well-established lessee,” commented Joe Randell, President and Chief Executive Officer, Chorus. “This latest transaction expands Chorus Aviation Capital’s leasing portfolio to 561 aircraft worth some US $1.1 billion and with US $830.0 millionin future contracted lease revenue.”

Upon the completion of this transaction, CAC’s announced portfolio commitments include 44 turboprops and 12 regional jets. When combined with the 47 aircraft leased under the Capacity Purchase Agreement with Air Canada, Chorus’ fleet of leased aircraft comprises 103 aircraft valued at approximately US $1.7 billion.

Chorus Aviation Announces Leasing Transaction for Five Q400s to Flybe and Reaches 50 Aircraft Portfolio Milestone

Provided by Chorus Aviation Inc/CNW

Delivering regional aviation to the world

HALIFAX, May 21, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) announced today that Chorus Aviation Capital (‘CAC’) has entered into a purchase agreement to acquire five, mid-life Bombardier Q400 aircraft currently on lease with Europe’s largest independent regional airline, Flybe. This transaction is expected to close by this summer and is subject to customary conditions precedent to closing, such as the novation of the existing leases, as well as the receipt of all regulatory approvals or consents required in connection with the acquisition of Flybe by Connect Airways Limited. With these acquisitions, Chorus Aviation Capital has announced 50 commitments to date for its regional aircraft leasing business.

“We are very pleased to expand our relationship with our existing customer, Flybe,” said Steve Ridolfi, President, Chorus Aviation Capital. “In less than two years we’ve grown our leasing portfolio to 50 aircraft acquired at approximately US $995.0 million with US $765.0 million in future contract lease revenue.”

In addition to growing CAC’s lease portfolio, these mid-life aircraft play to the Chorus group’s strengths as a diversified provider of regional aviation services,” commented Joe Randell, President and Chief Executive Officer, Chorus.  “At the end of the lease term, Chorus will have multiple potential uses for these aircraft, including lease extensions, re-leases or sale to new operators, conversions to non-passenger use, or disassembly for parts sales. I applaud the Chorus team for reaching this important milestone and for embracing our vision to become a worldwide provider of integrated regional aviation services.”

Upon the completion of this transaction, and seven other aircraft pending delivery to other customers, CAC’s portfolio will include 38 turboprops and 12 regional jets placed with 13 airlines on six continents. When combined with the 47 aircraft leased under the Capacity Purchase Agreement with Air Canada, Chorus’ fleet of leased aircraft has reached 97 aircraft valued at approximately US $1.6 billion.

Chorus Aviation Receives Court Approval to increase Permitted Foreign Ownership Levels to the Levels Permitted under the Canada Transportation Act

Provided by Chorus Aviation Inc/CNW

HALIFAX, May 13, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) is pleased to announce that the Ontario Superior Court of Justice (Commercial List) issued earlier today a final order approving the previously announced plan of arrangement under the Canada Business Corporations Act effecting amendments to Chorus Aviation’s articles of incorporation and by-laws to align the permitted level of non-Canadian ownership and control of its voting shares within its articles with those prescribed by the new definition of “Canadian” under the Canada Transportation Act(‘CTA’) as amended in June 2018.

Prior to the CTA amendments, no more than 25% of the voting interests of a Canadian air carrier could be owned or controlled by non-Canadians. The Government of Canada’s stated purpose in implementing the CTA amendments is to attract more foreign investment and encourage growth in the aviation sector by increasing, from 25% to 49%, the permitted level of foreign ownership of Canadian air carriers. At the same time, the CTA amendments introduced two new limitations on voting ownership and control, by capping the voting rights of single non-Canadians and of the aggregate of non-Canadian air carriers at 25%.

Chorus expects that its amended articles will be filed and become effective on or about May 13, 2019. Further details regarding the amendments are set out in the management proxy circular of Chorus dated March 22, 2019 and in Chorus’s February 19, 2019 news release which are available on SEDAR under Chorus’s profile at www.sedar.com.

Chorus Aviation Announces First Quarter 2019 Financial Results

Provided by Chorus Aviation Inc/CNW

Delivering regional aviation to the world

Q1 Financial Highlights and Year-to-Date Accomplishments

  • Net income of $33.4 million, inclusive of an unrealized foreign exchange gain of $16.8 million.
  • Adjusted net income1 of $19.0 million, or $0.13 per basic share.
  • Adjusted EBITDA1 of $74.7 million, a decrease of $2.9 million inclusive of the changes under the amended capacity purchase agreement (‘CPA’) and a $7.7 million quarter-over-quarter increase in stock-based compensation due to the strengthening of the share price.
  • Amended and extended the CPA with Air Canada to 2035.
  • Achieved an unprecedented 17-year collective agreement with Jazz pilots.
  • Completed a $97.26 million equity investment by Air Canada to enable fleet modernization and leasing growth.
  • Entered into a firm purchase agreement with Bombardier for nine CRJ900s.
  • Secured US $300.0 million credit facility to support the growth of the Regional Aircraft Leasing segment.
  • Diversified and grew the Regional Aircraft Leasing fleet to 45 regional aircraft acquired at approximately US $960.0 million inclusive of 10 transactions pending completion*.
  • Re-aligned executive team to support further growth and diversification.

HALIFAX, May 8, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) today announced first quarter 2019 financial results.  

“Our financial performance in the first quarter of 2019 met our expectations with operating income being relatively consistent with the same period in 2018,” stated Joe Randell, President and Chief Executive Officer, Chorus. “In the quarter we generated $74.7 million in adjusted EBITDA and net income of $33.4 million, inclusive of an unrealized foreign exchange gain of $16.8 million.

I’m very pleased with the execution of our growth and diversification strategy, which continues to build on the momentum achieved in 2018. Our strengthened partnership with Air Canada was a pivotal development in our transformation, securing Jazz’s place in the Air Canada Express network for an unprecedented 17 years to the end of 2035. The implementation of the amended CPA is progressing well, and we expect Jazz’s fleet modernization to commence with the delivery of five CRJ900s, leased from Air Canada, beginning in June.

In less than five months we’ve grown our third-party leasing portfolio by 11 aircraft and welcomed SpiceJet as a new customer.  India is one of the fastest-growing air travel markets in the world, and we’re pleased to add this award-winning and growing airline to our portfolio of lessees. Once all pending deliveries have been completed, we’ll have grown our portfolio to 45 aircraft acquired at approximately US $960.0 million with nearly US $745.0 million in future contract lease revenue. When combined with the 47 aircraft leased under the CPA, our fleet of leased aircraft has reached 92* aircraft with a net book value of approximately US $1.6 billion.

We’re maturing and building scale as a worldwide lessor.  Our core business with Air Canada is established for the long term; we’re now focusing more deeply on leveraging our vast expertise in regional operations to secure further growth.  The recent re-alignment of our chief executives places further emphasis on strategic and corporate planning to bolster our lines of business.

We are well positioned for the future. I extend my sincere thanks and gratitude to the Chorus team for these significant accomplishments,” concluded Mr. Randell.

Of the 10 pending transactions as at March 31, 2019, three aircraft were received prior to May 8, 2019.

FIRST QUARTER 2019 SUMMARY

Financial Performance – first quarter 2019 compared to first quarter 2018

In the first quarter of 2019, Chorus reported adjusted EBITDA of $74.7 million a decrease of $2.9 million or 3.7% relative to the first quarter of 2018.

The Regional Aviation Services segment decreased by $9.3 million quarter-over-quarter.  The results of the first quarter of 2019 reflect the 2019 CPA Amendments which reduced the fixed margin and incentive revenue as Chorus moves to market-based compensation rates. These reductions were offset by the implementation of the controllable cost guardrails that mitigated the expected first quarter CPA margin shortfall related to reduced fees.  Beyond the changes related to the amended CPA, the first quarter results were impacted by:

  • increased stock-based compensation of $7.7 million due to the strengthening of the share price;
  • decreased capitalization of major maintenance overhauls on owned CPA aircraft over the previous period; offset by
  • increased aircraft leasing under the CPA.

The decrease in the Regional Aviation Services segment was partially offset by an increase of $6.5 million in the Regional Aircraft Leasing segment related to the growth in aircraft acquired and under lease.

Adjusted net income was $19.0 million for the period, a decrease from 2018 of $7.7 million or 28.6% due to:

  • the $2.9 million decrease in adjusted EBITDA previously described;
  • an increase in depreciation of $3.1 million related to additional aircraft in the regional aircraft leasing segment;
  • an increase in interest costs of $1.9 million related to additional aircraft debt; offset by other of $0.2 million.

Net income was $33.4 million for the period, an increase of $28.2 million over 2018.  The increase was primarily due to the quarter-over-quarter change in unrealized foreign exchange gains on long-term debt of $34.7 million and decreased employee separation program costs of $3.1 million; offset by the previously noted $7.7 million decrease in adjusted net income and one-time signing bonuses of $2.0 million related to changes to the Jazz  pilot collective agreement.

Chorus Aviation Announces Leasing Transaction with SpiceJet of India

Provided by Chorus Aviation Inc/CNW

Delivering regional aviation to the world

HALIFAX, April 17, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) announced today that Chorus Aviation Capital (‘CAC’) has entered into agreements to deliver five new Bombardier Q400 aircraft to SpiceJet of India under a sale and leaseback transaction. CAC has delivered two aircraft and anticipates delivering all aircraft by the end of June 2019.

“We are excited to welcome SpiceJet as a new lessee. India is one of the fastest-growing air passenger markets in the world, and SpiceJet is well positioned to capitalize on that growth.  This is an excellent start for Chorus Aviation Capital in this critically-important market,” said Steve Ridolfi, President of Chorus Aviation Capital.    

Ajay Singh, Chairman and Managing Director, SpiceJet, said, “We see significant opportunities for growth, particularly in light of the recent reduction in aviation capacity in India, and are adding these five Q400s to support our expansion and ability to connect smaller towns and cities in India.  We are delighted to be working with Chorus Aviation Capital on this addition to our fleet and look forward to future opportunities to work together.”

Upon delivering all five aircraft included in this transaction, and five other aircraft pending delivery to other customers, CAC’s portfolio will consist of 45 aircraft comprising 33 turboprops and 12 regional jets valued at approximately US $960 million.

Chorus Aviation Completes Acquisition of Six Regional Aircraft

Provided by Chorus Aviation Inc/CNW

Delivering regional aviation to the world

HALIFAX, April 1, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) announced today the completion of a portfolio transaction between Chorus Aviation Capital and Elix Aviation Capital for six regional aircraft. The transaction had previously been announced on February 21, 2019.

The portfolio of six aircraft consists of two ATR72-600 aircraft on lease to Azul Airlines of Brazil, two Q400 aircraft on lease to Ethiopian Airlines, and two Q400 aircraft on lease to Jambojet of Kenya.

With these acquisitions, Chorus Aviation Capital’s portfolio of leased regional aircraft (inclusive of five transactions pending completion) has reached 40 aircraft, comprising 28 turboprops and 12 regional jets valued at approximately US $860 million.

Chorus Aviation Announces Executive Realignment

Provided by Chorus Aviation Inc/CNW

Delivering regional aviation to the world

  • Jolene Mahody appointed Executive Vice President and Chief Strategy Officer.
  • Colin Copp appointed Chief Operating Officer and President, Chorus Aviation Services.
  • Dennis Lopes appointed Senior Vice President, Chief Legal Officer and Corporate Secretary.
  • Gary Osborne appointed Chief Financial Officer.
  • Randolph deGooyer appointed President, Jazz Aviation.
  • Retirement of Richard (Rick) Flynn, Executive Vice President, and Chief Corporate Development Officer.

HALIFAX, March 11, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) announced today executive appointments to support its growth and diversification strategies. These appointments provide the expertise and focus required to further strengthen Chorus and build on the positive momentum achieved in its quest to bring regional aviation services to the world.

“I’m very pleased to make these appointments from within our highly experienced and skilled team,” stated Joe Randell, President and Chief Executive Officer, Chorus. “These underscore the significant contributions these individuals have made to strengthening and growing our organization. By maintaining the continuity of our core senior executive team, we will leverage and draw on their collective expertise and knowledge of this industry. We are well positioned for the future and will benefit from strong succession planning. The chief executives, including Steve Ridolfi, President, Chorus Aviation Capital, will report to me.”

“I take this opportunity to recognize Rick Flynn who has been instrumental in building our company.  Rick has been with us for over 30 years, and it is with mixed feelings that I announce his retirement from Chorus effective May 8, 2019. He has made a tremendous contribution and is highly respected in the industry,” continued Mr. Randell.

Jolene Mahody – appointed Executive Vice President and Chief Strategy Officer

Ms. Mahody currently serves as Executive Vice President and Chief Financial Officer and has been with the company for 27 years. In this new role, she retains responsibility for investor relations, and will also be responsible for strategic and corporate planning, mergers and acquisitions, government and community relations, marketing, corporate communications, corporate human resources and culture. Ms. Mahody’s new role is effective May 8, 2019.

Colin Copp – appointed Chief Operating Officer and President, Chorus Aviation Services

Mr. Copp is currently the President of Jazz and has been with the company for 30 years. In addition to being the lead executive responsible for Chorus’ relationship with Air Canada, he’ll also oversee all of the Chorus aviation services with the exception of aircraft leasing which will continue to be led by Mr. Ridolfi.  In this new role, Mr. Copp will also lead the development of new commercial opportunities to grow the contract flying, parts provisioning and maintenance functions at Jazz and Voyageur.  Mr. Copp will leverage the technical expertise within Jazz and Voyageur to bolster these lines of revenue and to support Chorus Aviation Capital. Scott Tapson, President of Voyageur and Randolph deGooyer, the newly appointed President of Jazz Aviation, will report to Mr. Copp who’s appointment is effective today.

Dennis Lopes – appointed Senior Vice President, Chief Legal Officer and Corporate Secretary

Mr. Lopes is currently the Senior Vice President, General Counsel and Corporate Secretary, and has been with Chorus for almost three years.  Mr. Lopes has been instrumental in supporting the growth of our regional aircraft leasing business and execution of our corporate finance initiatives. He will continue to be responsible for the legal affairs of Chorus and its subsidiaries in addition to his responsibilities as Corporate Secretary.  The change in Mr. Lopes’ title is effective today.

Gary Osborne – appointed Chief Financial Officer

Mr. Osborne is currently the Vice President, Finance and Business Services at Jazz, and will succeed Jolene Mahody as Chief Financial Officer.  Mr. Osborne has been with the company 14 years and will have responsibility for Chorus’ overall financial strategic direction comprising of financial reporting and planning, treasury, taxation, and internal audit. Over the next several months Ms. Mahody will work with Mr. Osborne to ensure a smooth transition to his new role which is effective May 8, 2019.

Randolph deGooyer – appointed President, Jazz

Mr. deGooyer is currently the Vice President, Commercial Services at Jazz, and effective today, will succeed Colin Coppas President of Jazz.  Mr. deGooyer has been with Jazz for nine years and will assume responsibility for the operation and administration of the company and will report to Mr. Copp. Mr. Copp will remain the Accountable Executive to Transport Canada until the transition period is completed.

Biographies are provided on the Chorus website at www.chorusaviation.ca.

Jazz Aviation Named One of Canada’s Best Diversity Employers for Eighth Consecutive Year

Provided by Chorus Aviation Inc/CNW

HALIFAX, March 1, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) is proud to announce that its subsidiary, Jazz Aviation LP (‘Jazz’), was named one of Canada’s Best Diversity Employers for the eighth consecutive year by Mediacorp Canada Inc.

“We are proud to continue to be recognized as one of Canada’s Best Diversity Employers,” said Colin Copp, President, Jazz. “We aim to embed diversity and inclusion into everything we do. This achievement is a testament to the efforts of the Jazz employees dedicated to creating workspaces that empower champions of inclusion and allow each other to work as their authentic selves. We will continue to prioritize creating workspaces which are welcoming to all diverse top talent.”

Canada’s Best Diversity Employers is an annual competition that recognizes employers across Canada that have exceptional workplace diversity and inclusiveness programs. These include successful diversity initiatives in a variety of areas, including programs for employees from five groups: women; members of visible minorities; persons with disabilities; aboriginal peoples; and lesbian, gay, bisexual and transgendered/transsexual (LGBT) people.

Chorus Aviation announces fourth quarter and year-end earnings

Provided by Chorus Aviation Inc/CNW

Delivering regional aviation to the world  

Selected Q4 2018 information:

  • Net income of $2.0 million, or $0.01 per basic share, inclusive of an unrealized foreign exchange loss of $32.9 million.
  • Adjusted net income1 of $35.1 million, or $0.25 per basic share, in increase of $11.5 million.
  • Adjusted EBITDA1 of $92.6 million, an increase of $9.7 million or 11.7% primarily due to increased earnings from the regional aircraft leasing segment.
  • Signed agreements to place seven aircraft with three lessees.
  • Completed the eighth Extended Service Program (‘ESP’) on a Dash 8-300 aircraft.

Selected annual 2018 information:

  • Net income of $67.0 million, or $0.49 per basic share, inclusive of an unrealized foreign exchange loss of $49.5 million.
  • Adjusted net income1 of $121.8 million, or $0.89 per basic share, an increase of $6.4 million.
  • Adjusted EBITDA1 of $342.7 million, an increase of $55.8 million or 19.4% primarily due to increased earnings from the regional aircraft leasing segment.
  • Diversified and grew leased fleet to 40 regional aircraft valued at approximately $1.1 billion1, inclusive of nine transactions pending completion. All pending transactions are subject to customary conditions precedent to closing.

2019 Year-to-Date Accomplishments:

  • Amended and extended the capacity purchase agreement (‘CPA’) with Air Canada, securing Jazz’s position in Air Canada’s regional network for the next 17 years.
  • Completed a $97.26 million equity investment by Air Canada to fund new, larger gauge aircraft at Jazz and further growth in regional aircraft leasing.
  • Entered into a firm purchase agreement with Bombardier for nine CRJ900s as part of Jazz’s fleet modernization plan.
  • Achieved an unprecedented 17-year collective agreement with Jazz pilots and enhanced the pilot mobility program to access pilot careers at Air Canada.
  • Secured US $300 million credit facility to support growth of regional aircraft leasing business.
  • Reached an agreement to acquire a portfolio of six aircraft with leases attached: two ATR72-600s on lease to Azul of Brazil, and four Q400s on lease with two other existing customers.
  • Jazz named one of Canada’s Top Employers for Young People for the seventh year and one of Atlantic Canada’s Top Employers for the eighth consecutive year.

1 Includes aircraft for which an agreement to lease has been signed but the aircraft have yet to be delivered.

HALIFAX, Feb. 22, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) today announced fourth quarter and year-end financial results for fiscal year ended December 31, 2018.  

“I’m very pleased with our start to 2019 as we build upon the positive momentum of 2018. Our growth and diversification strategy took further hold in 2018 generating $342.7 million in adjusted EBITDA and adjusted net earnings per basic share of $0.25, increases over 2017 of 11.7%. and 19.4% respectively.

Our group of companies performed well and reached important milestones that strengthened our company. These successes helped advance our vision to transform into a worldwide provider of regional aviation services. To date, we’ve grown our fleet to 40 aircraft, inclusive of nine transactions pending completion, valued at approximately $1.1 billion. The pipeline of opportunities for additional transactions is strong. With the establishment of our new US $300 million credit facility and the capital we have on hand, we’re maturing and building scale as a worldwide lessor.

Our strategic partnership with Air Canada and the value we’ve created through the amended and extended CPA will benefit our shareholders, employees and other stakeholders for the long term. We are well positioned to take advantage of new opportunities for growth and to effectively compete in an ever-changing industry. I extend my sincere thanks and gratitude to the Chorus team for these significant accomplishments,” said Joe Randell, President and Chief Executive Officer, Chorus. 

FOURTH QUARTER 2018 SUMMARY

Financial Performance – fourth quarter 2018 compared to fourth quarter 2017

In the fourth quarter of 2018, Chorus reported adjusted EBITDA of $92.6 million versus $82.9 million in 2017, an increase of $9.7 million or 11.7% due primarily to:

  • a $10.4 million increase due to growth in the regional aircraft leasing segment; offset by:
  • a net decrease in the regional aviation services segment of $0.7 million resulting from declines in incentive and other revenue and an increase in certain operating costs; offset by increased aircraft leasing under the CPA of $2.4 million.

Adjusted net income was $35.1 million for the period, an increase from 2017 of $11.5 million, or 48.6% due to:

  • the $9.7 million increase in adjusted EBITDA previously described;
  • lower foreign exchange losses on working capital which amounted to $4.7 million; and
  • a decrease of $0.4 million in depreciation; offset by:
  • an increase in interest costs of $1.2 million related to additional aircraft debt; and
  • an increase in income tax expense of $2.1 million.

Net income was $2.0 million for the period, a decrease of $18.0 million or 89.9% from the same period of 2017. The decrease was primarily due to a quarter-over-quarter change in unrealized foreign exchange losses on long-term debt of $30.5 million; offset by the previously noted $11.5 million increase in the adjusted net income and decreased employee separation program costs of $1.0 million.

YEAR-END 2018 SUMMARY

Financial Performance – Year end 2018 compared to year end 2017

For the year ended December 31, 2018, Chorus reported adjusted EBITDA of $342.7 million versus $286.9 million in 2017, an increase of $55.8 million or 19.4% due to:

  • a $47.3 million increase in the regional aircraft leasing segment; and
  • increased earnings in the regional aviation services segment of $8.5 million due primarily to increased aircraft leasing income under the CPA.

Adjusted net income was $121.8 million for the year, an increase from 2017 of $6.4 million, or 5.5% due to:

  • the $55.8 million increase in adjusted EBITDA previously described;
  • lower foreign exchange losses on working capital which amounted to $1.6 million; offset by:
  • increased income taxes of $20.5 million. In 2017 adjusted net income was impacted by changes in tax rates which were recorded in the third quarter of 2017. This change had the impact of lowering income taxes, and therefore increased adjusted net income for the twelve months ended December 31, 2017;
  • an additional $17.4 million in depreciation primarily related to new aircraft;
  • an increase in interest costs of $12.8 million related to additional aircraft debt and convertible units; and
  • an increase in other expenses of $0.3 million.

Net income was $67.0 million for the year, a decrease of $100.3 million from the same period of 2017. The decrease was primarily due to a year-over-year change in unrealized foreign exchange losses on long-term debt of $110.4 million and foreign exchange gain on cash held for deposit of $1.6 million; offset by decreased employee separation program costs of $5.3 million and the previously noted $6.4 million increase in the adjusted net income.

2019 OUTLOOK

On February 4, 2019, the amendments to the CPA first announced on January 14, 2019 (the ‘2019 CPA Amendments’) became effective on a retroactive basis to January 1, 2019.

The 2019 CPA Amendments result in a near-term reduction in fixed fees starting in 2019, as Chorus accelerates its transition to market-based rates. The reduction was implemented by eliminating the Infrastructure Fee per Covered Aircraft and the Fixed Margin per Covered Aircraft (each as defined in the CPA) and replacing them with a single ‘Fixed Margin’. As a result, Fixed Fee revenue in each of 2019 and 2020 is anticipated to be $75.5 million per year as compared to $111.3 million in 2018. In addition, the maximum future available performance incentives reduce from $23.4 million in 2019 and 2020, to an annual average maximum available amount of $3.4 million for the full term of the CPA. The near-term reductions are more than offset over the term of the CPA by incremental contracted revenue secured with the extension of the agreement including fixed fees and aircraft leasing.

In 2017, Chorus launched Chorus Aviation Capital, with the support of a $200.0 million investment in the Corporation from Fairfax. In 2018, Chorus raised further gross proceeds of $112.0 million, primarily for investment in its leasing business, through a public offering of Shares*. On February 4, 2019, the Air Canada investment was completed, providing further gross proceeds of $97.26 million, approximately 40% of which is to be invested in the leasing business carried on by Chorus Aviation Capital.

Since the start of 2017 Chorus has raised net proceeds of CAD $401.0 million in capital from both the issuance of convertible debt units and share capital, which if levered at 3:1, provides approximately $1.6 billion of investment capital. As at February 21, 2019, approximately three quarters of this capital has been committed including deposits on future commitments. Chorus anticipates committing the remaining balance by early 2020 in new to mid-life aircraft with long-term leases to a diverse group of high-quality customers around the world.

Capital expenditures for 2019, excluding those for the acquisition of aircraft and the ESP, and including capitalized major maintenance overhauls, are expected to be between $36.0 million and $42.0 million. Aircraft related acquisitions and the extended service program capital expenditures in 2019 are expected to be between $299.0 million and $302.0 million.

‘Shares’ refers to Chorus’ Class A Variable Voting Shares and Class B Voting Shares

Investor Conference Call / Audio Webcast

Chorus will hold an analyst call at 09:30 a.m. ET on Friday, February 22, 2019 to discuss the fourth quarter and year-end financial results. The call may be accessed by dialing 1-888-231-8191. The call will be simultaneously audio webcast via:
https://event.on24.com/wcc/r/1923003/1C1675BF55CDC811D8CD46BF1E407F1B

This is a listen-in only audio webcast. Media Player or Real Player is required to listen to the broadcast; please download well in advance of the call.

The conference call webcast will be archived on Chorus’ website at www.chorusaviation.ca under Reports > Executive Management Presentations. A playback of the call can also be accessed until midnight ET, February 28, 2019 by dialing toll-free 1-855-859-2056, and passcode 1093749#.

1NON-GAAP FINANCIAL MEASURES

This news release references several non-GAAP financial measures to supplement the analysis of Chorus’ results. These measures are provided to enhance the reader’s understanding of our current financial performance. They are included to provide investors and management with an alternative method for assessing our operating results in a manner that is focused on the performance of our ongoing operations and to provide a consistent basis for comparison between periods. These non-GAAP measures are not recognized measures under GAAP, and therefore they are unlikely to be comparable to similar measures presented by other companies. A reconciliation of these non-GAAP measures to their nearest GAAP measure is provided in the Management’s Discussion and Analysis (‘MD&A’) dated February 21, 2019.

Adjusted net income and Adjusted net income per Share are used by Chorus to assess performance without the effects of unrealized foreign exchange gains or losses on long-term debt and finance leases related to aircraft, foreign exchange gains or losses on cash held on deposit for investment in the regional aircraft leasing business, signing bonuses, employee separation program costs and strategic advisory fees. Chorus manages its exposure to currency risk on such long-term debt by billing the lease payments within the CPA in the underlying currency (US dollars) related to the aircraft debt. These items are excluded because they affect the comparability of our financial results, period-over-period, and could potentially distort the analysis of trends in business performance. Excluding these items does not imply they are non-recurring due to ongoing currency fluctuations between the Canadian and US dollar.

EBT is defined as earnings before income tax. Adjusted EBT (EBT before signing bonuses, employee separation program costs, strategic advisory fees and other items such as foreign exchange gains and losses) is non-GAAP financial measure used by Chorus as a supplemental financial measure of operational performance. Management believes Adjusted EBT assists investors in comparing Chorus’ performance by excluding items, which it does not believe will occur over the longer-term (such as signing bonuses, employee separation program costs and strategic advisory fees) as well, which items that are non-cash in nature such as foreign exchange gains and losses.

EBITDA is defined as earnings before net interest expense, income taxes, and depreciation and amortization and is a non-GAAP financial measure that is used frequently by companies in the aviation industry as a measure of performance. Adjusted EBITDA (EBITDA before signing bonuses, employee separation program costs, strategic advisory fees and other items such as foreign exchange gains or losses) is a non-GAAP financial measure used by Chorus as a supplemental financial measure of operational performance. Management believes Adjusted EBITDA assists investors in comparing Chorus’ performance by excluding items, which it does not believe will occur over the longer-term (such as signing bonuses, employee separation program costs and strategic advisory fees) as well, which items that are non-cash in nature such as foreign exchange gains and losses.

Adjusted EBITDA should not be used as an exclusive measure of cash flow because it does not account for the impact of working capital growth, capital expenditures, debt repayments and other sources and uses of cash, which are disclosed in the statements of cash flows, forming part of Chorus’ financial statements.

Consolidated Financial Analysis

Three months ended December 31, Year ended December 31,
(In thousands of Canadian dollars)20182017ChangeChange20182017ChangeChange
$$$%$$$%
Operating Revenue358,663356,0332,6300.71,451,1941,352,20098,9947.3
Operating Expenses297,402305,872(8,470)(2.8)1,234,5531,179,15455,3994.7
Operating Income61,26150,16111,10022.1216,641173,04643,59525.2
Net interest expense(14,447)(13,341)(1,106)(8.3)(56,285)(43,511)(12,774)(29.4)
Other(1)(33,784)(7,899)(25,885)(327.7)(56,194)54,448(110,642)(203.2)
Earnings before Income tax13,03028,921(15,891)(54.9)104,162183,983(79,821)(43.4)
Income tax expense(11,011)(8,918)(2,093)(23.5)(37,174)(16,660)(20,514)(123.1)
Net Income2,01920,003(17,984)(89.9)66,988167,323(100,335)(60.0)
Adjusted EBITDA(2)92,60882,9159,69311.7342,692286,91255,78019.4
Adjusted EBT(2)46,11632,53613,58041.7159,008132,09126,91720.4
Adjusted Net Income(2)35,10523,61811,48748.6121,834115,4316,4035.5

(1) Other includes foreign exchange loss/gain and gain on disposal of property and equipment.
(2) This is a non-GAAP financial measures – refer to Section 18 of the MD&A for disclosures on Non-GAAP financial measures.

Chorus Aviation announces portfolio transaction for six regional aircraft

Provided by Chorus Aviation/CNW

Delivering regional aviation to the world

HALIFAX, Feb. 21, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) announced today an agreement by Chorus Aviation Capital to acquire a portfolio of six aircraft with leases attached.  The portfolio consists of two ATR72-600s on lease to Azul of Brazil, and four Q400s on lease to two other existing customers of Chorus Aviation Capital.  With these acquisitions, Chorus’ suite of leased regional aircraft (inclusive of nine transactions pending completion) has reached 40 aircraft, comprising 28 turboprops and 12 regional jets valued at approximately US $850 million.

“We are delighted to secure this portfolio acquisition, which will add six more attractive turboprop aircraft to our global fleet and further our relationships with our customers,” commented Steven Ridolfi, President, Chorus Aviation Capital.  “With the establishment of our new US $300 million credit facility and the capital we have on hand, I’m confident the momentum achieved in our growth strategy will continue to build.”

The acquisitions of the aircraft on lease to Azul have been completed. The acquisitions of the aircraft on lease to the two other lessees remain to be completed subject to satisfaction of customary conditions precedent to closing.