From passengers to cargo: How airlines are overhauling their business – and their planes

News from The Globe and Mail – link to story and updates

Matthew McClearn ~ 11 May 2020

Air Canada’s first Boeing 777-300ER converted for cargo service, seen here, carried personal protective equipment from Shanghai to Toronto last month.COURTESY OF MANUFACTURER

More than a quarter of a century after retiring its last dedicated freighter, Air Canada is back in the business of flying exclusive cargo flights.

Last month, the passenger airline removed seats from four Boeing 777 300ERs, more than doubling the space available for goods on the planes. The aircraft are primarily moving masks, gowns and other personal protective equipment necessary to combat COVID-19 from Shanghai to Canada. The airline also plans to convert four Airbus A330s to serve routes to Europe and South America.

“We weren’t looking to be in the freighter business until this moment,” said Tim Strauss, the airline’s vice-president of cargo. “We’re doing this so we can get more PPE equipment back into Canada faster than could have been done otherwise.”

American Airlines and Finland’s Finnair have also rapidly converted aircraft into freighters, and new announcements arrive weekly. Now everyone from ground crews to airport officials to regulators are scrambling to adapt to these strange hybrid planes.

While not unprecedented, such wholesale repurposing of aircraft occurs only during humanitarian crises, said Jonathan McDonald, an analyst with aviation consultancy IBA. Rare examples included large-scale airlifts after a tropical cyclone destroyed Darwin, Australia, in 1974, and during famines in Ethiopia.

“In history, yes, there have been one-off events. You had the Berlin Airlift, I suppose, but that’s going back 70-plus years.”

Normally, people are a passenger airline’s most valuable cargo. But COVID-19 halted most human traffic and grounded fleets worldwide. Because passenger jets also carry cargo – typically high-value goods that justify increased air shipping costs – the result was a dramatic drop in available capacity for urgent shipments.

“In the pre-COVID-19 environment, 70 per cent of our cargo was travelling in the bellies of passenger aircraft,” said Craig Bradbrook, vice-president of aviation services at the Greater Toronto Airports Authority (GTAA), which runs Pearson International Airport. “The airlines have scrambled to look at ways in which they can continue to move cargo.”

In a bid to replace some of that lost capacity and a small fraction of the revenue they’ve lost as a result of COVID-19 travel bans, airlines began flying cargo-only flights. At first, some airlines strapped boxes onto seats in passenger compartments. But Air Canada quickly realized this approach risked damaging the pricey video entertainment systems on seat backs. Moving cargo in passenger cabins is also slow and cumbersome.

The airline’s maintenance chief, Richard Steer, suggested removing the seats and stuffing cargo into the cabin. Canada’s aviation regulator, Transport Canada, responded encouragingly to the proposal. Air Canada partnered with Avianor, a firm that specializes in commercial jet cabins, to convert the 777s at Montréal-Mirabel International Airport.

Late last month, Jazz Airlines (which operates as Air Canada Express) announced plans to convert up to 13 of its Dash 8-400 aircraft using a “simplified package freighter” kit provided by the manufacturer, De Havilland Canada. De Havilland is in the process of introducing kits for earlier Dash 8 models.

Todd Young, De Havilland’s chief operating officer, said his company already had a program in the works to convert Dash 8s into dedicated freighters. After COVID-19 struck, the company realized it needed a more immediate solution.

“We wanted to keep our airplanes flying,” he said. “We wanted our customers to have options, to be able to perform a different mission than transporting personnel or passengers from point to point.”

Since announcing the conversion kits with Jazz, five international customers have placed their own orders, Mr. Young said.

Passenger airliners were routinely converted for cargo service before the pandemic; manufacturers such as Boeing, as well as third parties, have been doing brisk business in recent years. But proper conversions are a one-way trip, typically reserved for mid-life jets. Seats, overhead bins and “monuments” such as areas designated for flight attendants and catering are removed. A new, larger door is cut. Floors are reinforced, windows are plugged, and cargo handling systems and fire suppression equipment are installed. Afterward, a converted plane can be expected to haul cargo for 15 years or more.

Such changes permanently alter an aircraft’s balance and weight; it can take years to satisfy regulators that a given conversion process produces jets that are safe to fly.

They’re also costly. Mr. McDonald said the price for a 737-400 can be up to US$3-million. For wide-body aircraft such as 767s, it’s about US$14-million.

These COVID-19 conversions are rapid and inexpensive by comparison. Air Canada’s 777s, for instance, are far too young to be candidates for permanent conversion. “It’s very much a temporary role change for the aircraft,” Mr. McDonald said. “There’s obviously very good intentions, it’s humanitarian, it’s doing your bit to fight this bloody coronavirus, and it provides utilization for aircraft, which would otherwise just be sitting.”

The limited nature of the changes also helps comfort regulators. De Havilland’s conversion kits, for instance, couldn’t be more straightforward. Operators remove the seats and install tie-down fittings to hold 17 nets for securing cargo inside the passenger compartment. Aircraft can be converted overnight, Mr. Young said.

To facilitate regulatory approval, Air Canada sought a much lower maximum cargo weight than a 777 is capable of carrying – no great sacrifice, because PPE doesn’t weigh much. The aircraft’s lock system for seats is compatible with hardware for securing nets, further simplifying matters.

“We made it as simple to approve as you could possibly make it,” said Mr. Strauss, who praised Transport Canada’s rapid accommodation.

Mr. Strauss said Air Canada would like to convert some 787s as well, but those aircraft feature different seat locking mechanisms. “That would have taken a whole different certification process and much, much longer time,” he said. “Who knows if you’d even have it done this year?”

Airlines and regulators aren’t the only party forced to adapt to these unusual hybrid aircraft. Ground handlers must also figure out how to work with them.

“It’s still a passenger aircraft in terms of design,” Mr. Bradbrook said. “The door apertures are for passengers. They were never designed to take bulk cargo. So we’ve had to work with airlines and ground handlers to look at new processes for loading and unloading cargo piece by piece.” GTAA has provided mobile roller beds to handlers, and some airlines are using catering trucks to load cargo onto the main deck.

Gradually, efficiency is improving. Air Canada’s first loading in Shanghai late last month took five hours, but with optimization and experience that was quickly compressed to one hour and 15 minutes – all while maintaining physical distancing.

But temporarily converted planes will never be as efficient or inexpensive to operate as dedicated freighters. They introduce new costs: Crew members are required in cabins on temporarily converted Dash 8s to monitor packages and react in the event of fire, for example. And they’ll never replace passengers, which Mr. Strauss said usually brings in at least five times as much revenue a kilogram as cargo does.

Moreover, routes typically enjoy two-way traffic. Yet during COVID-19, cargo often moves in only one direction, for example from China to Canada.

All that helps explain today’s sky-high air cargo rates. Mr. Bradbrook said he’d heard they’d tripled. “The rates are high,” Mr. Strauss said. “I’ve never seen anything quite like it.”

Asked how many more temporary conversions will take place during COVID-19, Mr. McDonald said he couldn’t hazard a guess.

“In order to make a reliable forecast, sometimes you need past data to gauge trends and habits. This is such a new phenomenon that you can’t gauge to what extent people are going to do this. It’s still very early days.”

Jazz Aviation and Air Canada Cargo to be First to Operate Routes with Dash 8-400 Aircraft Simplified Package Freighter Developed by De Havilland Canada

From Air Canada

Jazz Aviation and Air Canada Cargo to be First to Operate Routes with Dash 8-400 Aircraft Simplified Package Freighter Developed by De Havilland Canada

  • Re-configured aircraft can carry a total of 18,000 lbs [8,165 kg] cargo in cabin and belly
  • Enables transport of critical supplies to regional Canadian communities

HALIFAX and MONTREAL, April 24, 2020 /CNW Telbec/ – Chorus Aviation Inc. (“Chorus”) and its subsidiary Jazz Aviation LP (“Jazz”) announced today that Jazz and Air Canada, through its freight division Air Canada Cargo, will begin operating the recently approved Dash 8-400 Simplified Package Freighter developed by De Havilland Canada to short and medium haul markets under the Air Canada Express banner. These reconfigured aircraft will carry a total of 18,000 lbs [8,165 kg] of cargo in the passenger cabin and belly.

“De Havilland Canada’s Dash 8-400 Simplified Package Freighter will allow us to redeploy aircraft, while contributing to the collective fight against COVID-19 by supporting our customer, Air Canada, in the delivery of essential cargo,” said Randolph deGooyer, President, Jazz Aviation LP.  

“This aircraft will allow us to provide critical cargo lift on short and medium-haul routes that have been impacted by the reduction of passenger flights,” said Tim Strauss, Vice-President Air Canada Cargo. “The converted cabin, which can accommodate a cargo volume of 1,150 cubic feet is perfectly suited to loose load cargo like medical supplies, PPE and other goods needed to support the ongoing fight against COVID-19.”

Under an agreement with De Havilland Canada, Jazz has ordered a Service Bulletin and conversion kit that will be applied to the first of 13 select Dash 8-400 aircraft. De Havilland Canada will be the exclusive supplier of all future Dash 8-400 aircraft Simplified Package Freighter modifications for Jazz’s fleet. 

To facilitate the cargo-only flights, Air Canada Cargo has created five, segment-specific sales teams to focus on the unique needs of customers at different levels in the supply chain. Enquiries from shippers interested in Air Canada Cargo’s services may be sent to a special freighter email address that is monitored 24 hours per day: AC.freighter@aircanada.ca.

About Chorus Aviation and Jazz Aviation
Chorus is a global provider of integrated regional aviation solutions. Chorus’ vision is to deliver regional aviation to the world. Headquartered in Halifax, Nova Scotia, Chorus is comprised of Chorus Aviation Capital a leading, global lessor of regional aircraft, and Jazz Aviation and Voyageur Aviation – companies that have long histories of safe operations with excellent customer service. Chorus provides a full suite of regional aviation support services that encompasses every stage of an aircraft’s lifecycle, including aircraft acquisitions and leasing; aircraft refurbishment, engineering, modification, repurposing and preparation; contract flying; aircraft and component maintenance, disassembly, and parts provisioning.

Jazz Aviation LP has a strong history in Canadian aviation with its roots going back to the 1930s. As the largest regional carrier in Canada, Jazz has a proven track record of industry leadership and exceptional customer service and has leveraged that strength to deliver value to all its stakeholders. Jazz, under the Air Canada Express brand, operates more flights and flies to more Canadian destinations than any other airline, and has a workforce of approximately 5,000 professionals, highly experienced in the challenging and complex nature of regional operations.

About Air Canada and Air Canada Cargo
Air Canada is Canada’s largest domestic and international airline. Air Canada is a founding member of Star Alliance, the world’s most comprehensive air transportation network. Air Canada is the only international network carrier in North America to receive a Four-Star ranking according to independent U.K. research firm Skytrax, which also named Air Canada the 2019 Best Airline in North America.

Through its cargo division, Air Canada has been using mainline aircraft that would otherwise be parked to operate cargo-only flights. The aircraft on these flights carry no passengers but move in their baggage holds time-sensitive shipments, including urgent medical supplies, and goods to support the global economy. Air Canada has reconfigured the passenger cabins of three Boeing 777-300ER aircraft to give them additional cargo capacity, doubling the cargo capacity of those aircraft.

Air Canada Cargo, the freight division of Air Canada, provides cargo service to over 450 cities worldwide, with self-handled hubs in Toronto, Montreal, Vancouver, Calgary, Chicago, London and Frankfurt that allow for rapid shipment of goods.

Chorus Aviation issues statement regarding the administration of Flybe Limited

Provided by Chorus Aviation Inc/CNW

HALIFAX, March 5, 2020 /CNW/ – Earlier today, Flybe Limited (‘Flybe’) ceased operating and was placed in administration.  Chorus had three ATR 72-600 and five Dash 8-400 aircraft on lease with Flybe.

These aircraft account for less than 5.0% of the net book value of Chorus’ regional aircraft leasing segment fleet and less than 5.0% of Chorus’ consolidated annualized 2019 EBITDA. Chorus holds security in respect of these aircraft and has a plan to manage their repossession and remarketing.  Furthermore, Chorus’ loan agreements provide time and flexibility to remarket the aircraft.

“We have planned for this contingency and are executing against our plan,” stated Steven Ridolfi, President, Chorus Aviation Capital. “We are currently in negotiations with prospects for these aircraft. As noted, these aircraft represent only a small portion of the value of our leased aircraft portfolio.”

Nordic Aviation Capital to be De Havilland Canada’s First Customer for Classic Overhead Bin Extension on Dash 8-400 Aircraft

Provided by De Havilland Aircraft of Canada Limited/CNW

TORONTO, Feb. 25, 2020 /CNW/ – De Havilland Aircraft of Canada Limited (“De Havilland Canada”) announced today that Nordic Aviation Capital will be the launch customer for the Classic Overhead Bin Extension Solution for the Dash 8-400 aircraft. Under this agreement, De Havilland Canada will be the exclusive supplier of all future Dash 8-400 aircraft classic bin extension modifications for Nordic Aviation Capital’s fleet. The cost-efficient and environmentally friendly solution provides additional stowage volume in the Dash 8 aircraft’s cabin and is the perfect solution to meet growing customer requirements for more baggage space.

De Havilland Canada specifically designed the Classic Overhead Bin Extension to accommodate standard roll-aboard bags, thereby reducing the need for gate check service, and greatly improving airline efficiency and passenger comfort. Following each modification, the bins will feature more baggage volume, a larger door opening, a new door with NextGen latches, and will offer a consistent look-and-feel with newer Dash 8-400 aircraft interiors. Each bin also retains the robust design features that have been proven over millions of flights and will now accommodate two standard 22″ Travelpro bags per bin section.

“Over the last few years we have seen an increase in customer carry-on bags as well as an expansion in bag sizes. Having a new configuration that is able to meet these needs is very exciting for us and our customers,” said Tom Turley, Chief Operating Officer, Nordic Aviation Capital. “The Classic Overhead Bin Extension will allow those boarding and departing the aircraft to store and access their belongings with ease, improving overall gate-time and efficiency for passengers and airlines.”

“We are proud to announce Nordic Aviation Capital as the launch customer for the Classic Overhead Bin Extension for the Dash 8-400 aircraft,” said Todd Young, Chief Operating Officer, De Havilland Canada. “We are excited to have an environmentally friendly solution that manages the need for increased capacity in overhead bins. The extension will provide passengers a more enjoyable travel experience, and airlines a consistent interior layout.”

The Classic Overhead Bin Extension solution is currently being developed with De Havilland Canada’s supplier Safran Interiors.

Chorus Aviation Announces Fourth Quarter and Year-End 2019 Financial Results

Provided by Chorus Aviation Inc/CNW

A year of outstanding accomplishments

Q4 2019 Financial Highlights and Accomplishments

  • Net income of $36.6 million, or $0.23 per basic share, a period-over-period increase of $34.4 million.
  • Adjusted net income1 of $23.3 million, or $0.15 per basic share, a decrease of $12.0 million due to expected reductions resulting from the 2019 amendments to the Capacity Purchase Agreement (‘CPA’) (the ‘2019 CPA Amendments’) offset by growth in the Regional Aircraft Leasing segment.
  • Adjusted EBITDA1 of $88.6 million, a decrease of $3.4 million.
  • Increased the committed leased fleet to 64 aircraft, representing growth of 60% year-over-year.
  • Added new aircraft type through a sale leaseback transaction with airBaltic for five new Airbus A220-300s.
  • Added Croatia Airlines as a new airline customer to the leasing portfolio.
  • Extended three aircraft lease agreements with Aeromexico Connect and completed an additional sale leaseback transaction with IndiGo for two new aircraft.
  • Completed the Extended Service Program (‘ESP’) on three additional Dash 8-300s, bringing the total number of ESP aircraft generating leasing revenue under the CPA to 13.
  • Established a regional aircraft parts depot in Dubai, UAE, enhancing Chorus’ ability to market its parts provisioning and sales offering internationally.

Full-Year 2019 Financial Highlights and Accomplishments

  • Net income of $133.2 million, or $0.85 per basic share, a period-over-period increase of $65.7 million.
  • Adjusted net income1 of $96.2 million, or $0.61 per basic share, a decrease of $26.1 million due to expected reductions resulting from the 2019 CPA Amendments offset by growth in the Regional Aircraft Leasing segment.
  • Adjusted EBITDA1 of $341.7 million, an increase of $1.2 million.
  • Increased adjusted EBT1 in the Regional Aircraft Leasing segment to 22% of overall adjusted EBT.
  • Amended and extended the CPA with Air Canada to December 31, 2035.
  • Jazz pilots ratified their collective agreement with no strike or lockout provisions for the extended term of the CPA.
  • Completed Air Canada investment for gross proceeds of $97.26 million and raised gross proceeds of $86.3 million through a public offering of 5.75% Unsecured Debentures to support the growth of Chorus.
  • Executed a purchase agreement for nine CRJ900s that will earn leasing revenue under the CPA starting in 2020.
  • Completed the first sale of three leased Dash 8-400s, generating net proceeds, after debt repayment, of US $25.0 million for reinvestment in the Regional Aircraft Leasing segment.
  • Received numerous awards as a top employer in Canada, and named among Canada’s Safest Employers 2019, taking gold in the Transportation category.

HALIFAX, Feb. 12, 2020 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) today announced fourth quarter and year-end 2019 financial results.

“2019 was a transformative year for Chorus creating significant value for all of our stakeholders. On total revenues of $1.4 billion, we generated adjusted EBITDA of $341.7 million.

We secured and strengthened our partnership with Air Canada by amending and extending the CPA for a further 17 years, providing a minimum of $2.5 billion in contracted revenues with opportunities to increase further. This was a critical accomplishment as it laid a strong, long-term foundation from which we continue to build and diversify our company. Air Canada’s $97.26 million investment in Chorus equity, which included a five-year hold period, further aligns our organizations and is a strong endorsement of our growth and diversification strategy.

Our group of companies performed very well, and most importantly, did so safely and with operational integrity. We carried just under 11 million passengers under the Air Canada Express brand, secured new contracted flying missions in several international markets, and established an aircraft parts depot in Dubai. 

We made significant advancements in maturing our business to become a worldwide provider of regional aviation solutions. We successfully raised $183.5 million in capital and secured a US $300 million warehouse facility to support our expansion in regional aircraft leasing. We now have a committed portfolio of 64 aircraft, a 60% increase over 2018, placed with 16 customers. We’re pleased with the returns we’re generating in our leasing business, which is delivering strong and consistent margins. Together with the aircraft we have leased under the CPA our committed portfolio comprises 1352,3 aircraft with approximately US $2.1 billion2,3,4 in future contracted lease revenue, making Chorus one of the world’s largest regional aircraft lessors. 

We remain confident that we can expand our leasing portfolio by up to 20 aircraft per year funded through a combination of debt and cash from operations. The timing of these future transactions will not occur on a consistent basis; however, we expect the majority will be executed in the second half of this year. The expected growth in aircraft leasing will more than offset planned fixed fee reductions in the CPA in 2020 and beyond.

I extend my thanks and gratitude to the Chorus team for making 2019 a standout year in our history, and I look forward to the many new, exciting milestones we’ll achieve together,” stated Joe Randell, President and Chief Executive Officer, Chorus.

Fourth Quarter Summary

In the fourth quarter of 2019, Chorus reported adjusted EBITDA of $88.6 million, a decrease of $3.4 million or 3.7% relative to the fourth quarter of 2018.

The Regional Aircraft Leasing segment’s adjusted EBITDA increased by $12.3 million primarily related to the growth in aircraft earning leasing revenue. The sale of three Dash 8-400s resulted in net cash proceeds of US $25.0 million and produced a strong internal rate of return since the acquisition of these aircraft. This disposal also produced an accounting loss related to the wind-up of the special purpose entities that lowered adjusted EBITDA and adjusted net income by $3.4 million and $1.3 million, respectively.

In line with expectations, the Regional Aviation Services segment’s adjusted EBITDA decreased $15.8 million. The decrease reflects the 2019 CPA Amendments which reduced the Fixed Margin and Performance Incentive revenue when Chorus moved to market-based compensation rates. Beyond the changes related to the 2019 CPA amendments, fourth quarter results were impacted by:

  • increased stock-based compensation of $6.0 million due to the change in the share price inclusive of the reduction related to the change in fair value of the Total Return Swap which was implemented in the fourth quarter of 2019: and
  • decreased capitalization of major maintenance overhauls on owned CPA aircraft over the previous period of $1.2 million.

Adjusted net income was $23.3 million for the quarter, a decrease of $12.0 million due to:

  • the $3.4 million decrease in adjusted EBITDA previously described;
  • an increase in depreciation of $6.6 million primarily related to additional aircraft in the Regional Aircraft Leasing segment;
  • an increase in net interest costs of $5.3 million primarily related to additional aircraft debt in the Regional Aircraft Leasing segment; and
  • an increase in non-operating costs of $2.5 million primarily related to the loss on disposal of an engine of $1.2 million and a change in foreign exchange losses of $0.8 million; offset by
  • a $5.7 million decrease in income tax expense resulting from lower adjusted EBT.

Net income increased $34.3 million primarily due to the change in net unrealized foreign exchange gains on long-term debt of $46.2 million offset by the previously noted $12.0 million decrease in adjusted net income.

Year-End Summary

Chorus reported adjusted EBITDA of $341.7 million for 2019, an increase of $1.2 million over 2018.

The Regional Aircraft Leasing segment’s adjusted EBITDA increased by $42.4 million was primarily due to the growth in aircraft earning leasing revenue.

In line with expectations, the Regional Aviation Services segment’s adjusted EBITDA decreased by $41.3 million, which reflect the 2019 CPA Amendments which reduced the Fixed Margin and Performance Incentive revenue when Chorus moved to market-based compensation rates. These reductions were partially offset by the implementation of the Controllable Cost Guardrail that mitigated the expected CPA margin shortfall resulting from reduced fees. Beyond the changes related to the 2019 CPA Amendments, 2019 results were impacted by:

  • increased stock-based compensation of $15.0 million due to the change in the share price inclusive of the reduction related to the change in fair value of the Total Return Swap which was implemented in the fourth quarter of 2019;
  • decreased capitalization of major maintenance overhauls on owned CPA aircraft of $1.9 million over the previous period; offset by
  • increased aircraft leasing under the CPA.

Adjusted net income of $96.2 million, decreased over 2018 by $26.1 million due to:

  • an increase in depreciation of $18.5 million primarily related to additional aircraft in the Regional Aircraft Leasing segment;
  • an increase in net interest costs of $15.5 million primarily related to additional aircraft debt in the Regional Aircraft Leasing segment; and
  • an increase in non-operating costs of $5.6 million primarily related to foreign exchange losses of $4.2 million in addition to a loss on disposal of property and equipment of $0.5 million; partially offset by
  • the $1.2 million increase in adjusted EBITDA previously described; and
  • a decrease in income tax expense of $12.2 million resulting from lower adjusted EBT.

Net income increased $65.7 million over 2018 due to the change in net unrealized foreign exchange gains on long-term debt of $90.8 million and decreased employee separation program costs of $3.1 million; offset by the previously noted decrease of $26.1 million in adjusted net income and increased signing bonuses of $2.0 million related to the Jazz pilot collective agreement.

Outlook

(See cautionary statement regarding forward-looking information below)

The 2019 CPA Amendments became effective on a retroactive basis to January 1, 2019. Further information concerning the 2019 CPA Amendments and the Air Canada Investment is contained in the Chorus’ Material Change Reports dated January 24, 2019 and February 13, 2019, which are available on SEDAR at www.sedar.com. The 2019 CPA Amendments resulted in a reduction in fixed fees starting on January 1, 2019, as Chorus moved to market-based rates under the CPA. The reduction was implemented by eliminating the Infrastructure Fee per Covered Aircraft and the Fixed Margin per Covered Aircraft (as this term was defined in the CPA) which were replaced with a single Fixed Margin. As a result, fixed fee revenue in each of 2019 and 2020 is anticipated to be $75.2 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.

Aircraft leasing revenue under the CPA, which is included in the Regional Aviation Services segment, is expected to grow with the delivery of nine committed CRJ900s in 2020, three ESPs to be completed in 2020 and two remaining ESPs by 2022. The Regional Aircraft Leasing segment’s future revenue is expected to grow in 2020 and at a minimum Chorus will have 60 aircraft equivalent earning revenue during the year versus 43 in 2019.

With the addition of the aircraft under both the Regional Aircraft Leasing segment and the aircraft leasing revenue under the CPA, Chorus’ estimated future contracted lease revenue is approximately US $2.1 billion4. When the CPA fixed margin revenue of US $0.6 billion is included with the total future contracted revenue, Chorus’ future revenue approximates US $2.7 billion4. (see footnote 4 in the following table)

Capital expenditures in 2020, including capitalized major maintenance overhauls but excluding expenditures for the acquisition of aircraft and the ESP are expected to be between $38.0 million and $44.0 million. Aircraft related acquisitions and the ESP capital expenditures in 2020 are expected to be between $442.0 million and $452.0 million.

Capitalized terms used but not defined in the Outlook section have the meanings given to them in Management’s Discussion and Analysis (the ‘MD&A’) dated February 12, 2020, which is available on Chorus’ website (www.chorusaviation.com) and SEDAR (www.sedar.com).

The following table provides the number of closed and pending transactions announced to-date:

(expressed in millions of US dollars, except number of aircraft)

Customer2016 –
Q3 2019
 IncreaseTotal 2016 –
2019(2)
Aeromexico33
Air Nostrum44
airBaltic55
Azul Airlines55
CityJet22
Croatia Airlines22
Ethiopian Airlines55
Falcon
Flybe88
Indigo628
Jambojet44
KLM Cityhopper11
Malindo Air(3)44
Philippine Airlines33
SpiceJet55
Virgin Australia33
Wings Air(3)22
Total Regional Aircraft Leasing55964
Deal value US$1,335.0
Future Lease Revenues US(4)$960.0
Total Regional Aviation Services7171
Future Lease Revenues US(4)(5)$1,180.0
Chorus Total Aircraft1269135
Future Lease Revenues US(4)$2,140.0

WestJet Dash 8 landing accident

News provided by LARA News – link to full story

By Glenn Sands February 3, 2020

The nose gear of a de Havilland Dash 8-400 operated by WestJet collapsed at the aircraft touched down at Terrace Northwest Regional Airport in British Columbia on January 31. The Dash 8 was operating from Vancouver, British Columbia when the accident happened.

Canada’s Aviation Herald stated that as C-FKWE touched down on the airport’s Runway 33, the plane’s nose gear collapsed before it came to halt on the runway. The flight’s 42 passengers left the aircraft with no injuries.

The Dash 8 was being operated by WestJet Encore, which is a regional arm of the LCC Canadian airline. The airline selected the Dash 8 to serve in the remote regions and currently has 47 of the type, most of which arrived in 2018.

Chorus Aviation Capital adds 34 aircraft on-lease in a record 2019

Provided by Chorus Aviation Inc/CNW

Concludes year with additional leases to Croatia Airlines and IndiGo, and lease extensions to Aeromexico Connect

Third-party committed leased fleet has now reached 641 aircraft

HALIFAX, Jan. 13, 2020 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) announced today that Chorus Aviation Capital (‘CAC’) added a total of 34 aircraft on-lease in 2019. With this strong market performance, CAC’s third-party lease portfolio has now reached 641 aircraft.

Year-end, and previously unannounced transactions, include the acquisition of two mid-life Dash 8-400 aircraft (MSNs 4300 and 4301) on lease to Croatia Airlines, and an additional sale leaseback of two new ATR 72-600 aircraft (MSNs 1545 and 1552) with IndiGo. Additionally, CAC has extended its lease agreements with Aerolitoral, S.A. de C.V. (d.b.a. ‘Aeromexico Connect’), a subsidiary of Aerovías de México, S.A. de C.V. (d.b.a. ‘Aeromexico’), on three Embraer 190 aircraft previously acquired in 2017.

“We are delighted with the confidence that our customers have shown in us in 2019. Our strong focus on execution resulted in a significant expansion of our portfolio and the achievement of several significant milestones in the advancement of our leasing company,” said Steve Ridolfi, President, Chorus Aviation Capital. “In the three short years since the establishment of CAC, we have grown the third-party leasing portfolio to 641 aircraft valued at approximately US$1.3 billion with US$960 million in future contract lease revenue.”

“The year 2019 was one of many firsts for CAC. We secured a US$300.0 million warehouse facility, traded our first portfolio aircraft with the previously announced sale of three Dash 8-400 Falcon aircraft, and extended our first leases with the renewal of the three Aeromexico Connect E190 aircraft. With this successful aircraft re-lease outcome, we have no further scheduled lease expiries until 2021. Additionally, 2019 saw us deliver our first Airbus A220-300 aircraft for lease to airBaltic,” continued Mr. Ridolfi.

“We are pleased with the very positive momentum and the achievement of these important milestones,” commented Joe Randell, President and Chief Executive Officer, Chorus. “Trading aircraft, securing lease extensions, and penetrating new markets further demonstrates the capabilities of our maturing aircraft leasing business. As we continue to deliver on our growth strategy, our approach remains to conservatively and profitably build our leasing business.”

De Havilland Canada Demonstrates Commitment to the Middle East and Africa During this Week’s Dubai Airshow

Provided by De Havilland Aircraft of Canada/CNW

  • Announced commitments for up to 37 Dash 8-400 aircraft, the world’s most advanced, most productive and most eco-friendly turboprop
  • Signed a Memorandum of Understanding with Palma Capital Limited and Export Development Canada to facilitate potential Dash 8-400 aircraft transactions
  • Enhanced support to customers in the region with the addition of two Authorized Service Facilities

DUBAI, Nov. 21, 2019 /CNW/ – De Havilland Aircraft of Canada Limited (“De Havilland Canada”) today successfully concluded its activities for the 2019 Dubai Airshow.  During the Airshow, the company announced commitments for up to 37 Dash 8-400 aircraft, the world’s most advanced and most productive turboprop, and also announced three agreements relating to its aftermarket services. De Havilland Canada also showcased a Dash 8-400 aircraft operated by Jambojet, a brand of Kenya Airways, and Kenya’s first low-cost airline.

“We are especially pleased with our performance at this year’s Dubai Airshow since it is our first Airshow in the region since the relaunch of De Havilland Canada in June this year,” said Todd Young, Chief Operating Officer, De Havilland Canada. “Our teams have shown that they are working with our customers to secure the aircraft orders that will mutually drive our businesses forward. We have also demonstrated our commitment to enhance our aftermarket services network to ensure that our customers are benefitting from the highest level of support to maximize the efficiency of their fleets.”

The announced commitments to purchase aircraft included a firm order for three Dash 8-400 aircraft from Nigeria-based Elin Group Limited (“Elin”); a conditional order from ACIA Aero Capital Limited (“ACIA”) for three Dash 8-400 aircraft; a Letter of Intent (LOI) to purchase 20 Dash 8-400 aircraft signed by Palma Holding Limited (“Palma”); an LOI for up to six Dash 8-400 aircraft signed by the Republic of Ghana; and a third LOI to purchase five Dash 8-400 aircraft signed by Aurora, a Russian regional airline.

De Havilland Canada also announced that it had signed a Memorandum of Understanding (MOU) with Palma Capital Limited (“Palma”) and Export Development Canada (EDC) that outlines mutual cooperation between the three parties regarding potential Dash 8-400 aircraft transactions such as aircraft procurement and leasing opportunities and sale-leaseback opportunities for the Middle East and Africa.

The company reaffirmed its commitment to operators in the region with the addition of two Authorized Service Facilities to its network. Known for its specialization in business aviation services, charter and aircraft management, Falcon Aviation Services (“Falcon”) is expanding its MRO portfolio to include base maintenance for the Dash 8-400 aircraft and will support operators of Dash 8-400 aircraft from its facilities in Abu Dhabi, United Arab Emirates, while Mediterranean Aviation Company Limited (“Medavia”), will offer heavy check maintenance services for all Dash 8 Series aircraft from its facilities located in Malta. Medavia and Falcon’s experience supporting the oil and gas industry and operating at remote airfields provides the first-hand knowledge that will be of great benefit to operators of Dash 8 aircraft in the region.

Falcon and De Havilland Canada also announced that the companies had signed a five-year extension to the Smart Parts program that provides component management solutions and support for Falcon’s fleet of three Dash 8-400 aircraft.  The Falcon team confirmed that De Havilland Canada’s expertise and commitment to deliver the best solutions for the management of components allows the airline to focus attention on other business priorities.

Expliseat’s ultra-light TiSeat E2 for the Dash 8-400 aircraft was also demonstrated in De Havilland Canada’s Chalet during the Airshow. Depending on the configuration, the seats reduce in-flight weight by 300 to 1,000 lbs. and offer up to 1 per cent in fuel savings, while preserving passenger comfort.

Government of Ghana Signs Letter of Intent to Purchase up to Six Dash 8-400 Aircraft from De Havilland Canada

Provided by De Havilland Aircraft of Canada Limited/CNW

The Dash 8-400 aircraft continues to confirm its position as the world’s most advanced and most productive turboprop

DUBAI, Nov. 19, 2019 /CNW/ – Today, at the Dubai Airshow, De Havilland Aircraft of Canada Limited (“De Havilland Canada”) announced that the Republic of Ghana has signed a Letter of Intent to purchase up to six Dash 8-400 aircraft. The country recently announced plans to launch a home based carrier in Accra, Ghana to serve domestic, regional and international routes.

“We are very excited to be working with De Havilland Canada to develop our fleet with a modern aircraft that will support the development of our new national airline and provide a strong foundation as we work to build a broader network and become the aviation hub of West Africa,” said Joseph Kofi Adda, Minster of Aviation, Ghana. “The Dash 8-400 aircraft provides the proven reliability and performance we are seeking and will be a great asset to our airline.  

“We are committed to offering our communities state-of-the-art air transportation, and the Dash 8-400 aircraft offers the perfect mix of passenger amenities, cargo capacity, operational economics and environmental credentials to meet our requirements. We are looking forward to finalizing a purchase agreement with De Havilland Canada in the near future and securing up to six Dash 8-400 aircraft for our fleet,” added the Minister.

“It is always a source of pride when our Dash 8-400 aircraft is selected by a new operator and we welcome this opportunity to work with the people of Ghana as they establish their home based carrier,” said Todd Young, Chief Operating Officer, De Havilland Canada. “The advanced Dash 8-400 aircraft continues to prove its capabilities across Africa’s diverse landscape and we are confident that its hot-and-high performance, as well as its short take-off and landing capability will meet the demands of Ghana’s warm, dry coastal areas, its hotter, more humid regions, as well as any challenging airport operations.”   

Aurora Signs Letter of Intent to Acquire Five Dash 8-400 Aircraft from De Havilland Canada

Provided by De Havilland Aircraft of Canada/CNW

DUBAI, Nov. 19, 2019 /CNW/ – Today, during the Dubai Airshow, De Havilland Aircraft of Canada Limited (De Havilland Canada) announced that Aurora has signed a Letter of Intent (LOI) to purchase five Dash 8-400 aircraft. Aurora, a subsidiary of Aeroflot, is based in Sakhalin, Russia. The airline currently operates eight Dash 8 aircraft, including two Dash 8-400 turboprops.

“We are very excited about the expansion of our fleet to include additional Dash 8-400 aircraft,” said Konstantin Sukhorebrik, General Director, Aurora. “The aircraft’s diverse capabilities and jet-like performance will support our growing network and meet the increasing demands for charter operations. We aim to increase traffic and expand our local, regional and international footprint with the additional aircraft. In the future, we plan on ordering more Dash 8-400 aircraft as we look to streamline our fleet with a harmonized configuration.  The opportunity to increase seat capacity with the new configurations offered by De Havilland Canada allows us to tap into growth and new markets.”

“The outstanding economics and performance of the Dash 8-400 aircraft make it an exceptional addition to any fleet, and we are always pleased when an airline reorders our Dash 8-400 aircraft to expand their operations,” said Todd Young, Chief Operating Officer, De Havilland Canada. “We will assist Aurora as they review funding options for the five Dash 8-400 aircraft and work to finalize a firm purchase agreement.”