Tag: Jazz

Jazz Aviation’s Captain Nick Seemel honoured with ALPA’s Air Safety Award

Provided by Chorus Aviation Inc./CNW

HALIFAX, July 18, 2019 /CNW/ – Jazz Aviation LP (‘Jazz’), a subsidiary of Chorus Aviation Inc. (‘Chorus’) (TSX: CHR), is proud to announce that the Air Line Pilots Association, Int’l (‘ALPA’) presented Captain Nick Seemel with its prestigious Air Safety Award for his outstanding leadership in aviation safety. Captain Seemel was honoured with this award at ALPA’s 65th Air Safety Forum held today in Washington, D.C.

A Jazz Aviation pilot for more than 30 years, Captain Seemel is a leader whose work to enhance safety in Canadian aviation has earned him the respect of his fellow pilots and airline management.

“Captain Seemel has devoted his career to improving aviation safety and his hard work has made Jazz a better place for all employees,” said Captain Steve Linthwaite, Vice President – Flight Operations at Jazz. “We thank him for his unwavering commitment to safety and congratulate him on this well-deserved recognition.”

In his role as the Air Safety Coordinator for ALPA Canada, he leads a team of pilot volunteers whose focus is to ensure the highest standards of aviation safety. A strong advocate for safety reporting programs, he assisted in instructing ALPA pilots on the implementation of safety management systems, the non-punitive safety reporting process that has contributed to greatly advance aviation safety in North America.

“Captain Seemel is a dedicated Jazz employee who demonstrates collaboration, teamwork and the pursuit of safety excellence which has benefited us all and will continue to drive our safety culture for years to come,” said Captain Bob Palmer, Vice President – Safety, Quality and Environment at Jazz. “It is an honour to work closely with such a committed safety representative.”

Captain Seemel is a line training captain at Jazz Aviation. He continues to share his world-leading expertise on safety management systems as a member of the International Civil Aviation Organization’s Safety Management Panel, which is currently reviewing and amending international standards.

The ALPA Air Safety Award is presented yearly to recognize outstanding contributions by ALPA members in the field of air safety. ALPA is the world’s largest pilot union, representing more than 62,000 pilots at 35 airlines in Canada and the United States.

UK’s Ideagen in project with Canada’s Jazz Aviation to enhance mobile reporting and organisation-wide risk management

Provided by Ideagen

deagen’s Coruson to be rolled out across Jazz’s operations to strengthen the airline’s safety culture

Nottingham, UK – 13 May 2019

Ideagen, the UK-based, global software firm, announced today that it is working with Canada’s largest regional airline, Jazz Aviation, on a project that will enhance mobile reporting and risk management across the carrier’s operations.

Jazz – the largest regional partner to Air Canada, Canada’s flagship airline – will implement Ideagen’s Coruson software as it looks to further strengthen its safety culture through enhanced safety reporting and analysis.

Captain Robert Palmer, Jazz Aviation’s Vice President for Safety, Quality and Environment, said: “The goal of this project is to enhance safety performance through proven risk management techniques as well as ensuring risk mitigations to address the root cause of the issues.  We are pleased to be working with Ideagen in advancing safety management at Jazz with the implementation of Coruson.”

Coruson will become Jazz’s risk management and reporting system allowing airline management to assess risks and mitigate issues before they become safety events.

“Mobile reporting through Coruson will be a significant benefit for our front-line employees. Through this project with Ideagen, we anticipate building on our strong safety culture and believe that mobile reporting will further engage our employees in reporting overall. The simplicity of the Coruson system, ease of access and streamlined reporting, will undoubtedly result in more reports and more safety data,” stated, Captain Palmer.

Steven Cespedes, Ideagen’s Head of Aviation, said: “We are delighted and excited to be working with such an ambitious organisation in the form of Jazz Aviation.

“Our Coruson software is used by some of the largest aviation organisations in the world and we are pleased that such a risk aware airline with an already strong safety culture has chosen to use our software to enhance its safety and risk management processes.”

Ross McLarnon, Product Manager for Ideagen’s Coruson, added: “This is an exciting time for our Coruson software as we continue to see strong demand across the aviation industry.

“We are delighted to be able to add Jazz Aviation – such an ambitious and highly regarded airline particularly across North America – to our ever growing list of aviation clients.

“I am personally looking forward to working with the team at Jazz Aviation and look forward to them providing valuable insights into the use and future development of our Coruson software.”

TSB deploys a team of investigators following an accident at Toronto/Lester B. Pearson International Airport, Ontario

Provided by Transportation Safety Board of Canada/CNW

RICHMOND HILL, ON, May 10, 2019 /CNW/ – The Transportation Safety Board of Canada (TSB) is deploying a team of investigators to Toronto/Lester B. Pearson International Airport, Ontario, where a DHC-8-300 aircraft, operated by Jazz (flight 8615), was taxiing to a gate when it was struck by a fuel tanker. The TSB will gather information and assess the occurrence.

The TSB is an independent agency that investigates marine, pipeline, railway and aviation transportation occurrences. Its sole aim is the advancement of transportation safety. It is not the function of the Board to assign fault or determine civil or criminal liability.

The TSB is online at www.tsb.gc.ca. Keep up to date through RSSTwitter (@TSBCanada), YouTubeFlickr and our blog.

SOURCE Transportation Safety Board of Canada

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.

Bombardier Sells Nine CRJ900 Aircraft to Chorus Aviation

Provided by Bombardier Commercial Aircraft/Globe Newswire

Jazz Aviation LP to be the first Canadian Operator of the ATMOSPHÈRE Cabin under the Air Canada Express banner

MONTRÉAL, Feb. 06, 2019 (GLOBE NEWSWIRE) — Bombardier Commercial Aircraft announced today that a subsidiary of Chorus Aviation Inc. (“Chorus Aviation”) has finalized a firm purchase agreement for nine CRJ900 aircraft. These aircraft will be operated by Jazz Aviation LP, a subsidiary of Chorus Aviation, under the Air Canada Express banner, making them the first Canadian operator of the new ATMOSPHÈRE cabin for CRJ Series regional jets.


CRJ900 aircraft in Air Canada Express livery
Bombardier Commercial Aircraft

Based on the list price of the CRJ900 aircraft, the order is valued at approximately $437 million U.S.

“We are delighted that Chorus and Jazz have chosen Bombardier products for the growth and renewal of their fleet. It reaffirms their confidence in the value that the CRJ Series provides to airlines,” said Fred Cromer, President, Bombardier Commercial Aircraft. “The CRJ900 aircraft is ideally suited to growing markets and is recognized for its superior performance, economics and passenger comfort.”

“The addition of these new CRJ900 aircraft is part of the ongoing modernization of our Jazz fleet,” said Joseph Randell, President and Chief Executive Officer, Chorus. “These aircraft provide unit operating costs that are amongst the lowest of any regional aircraft, allowing us to more effectively compete while addressing changing market demand.”

Jazz, under the Air Canada Express brand, will operate the CRJ900 in a dual-class cabin configuration with 76 seats. The airline intends to take delivery of their first aircraft with the latest enhancement to the CRJ Series regional jets – the ATMOSPHÈRE cabin in the first half of 2020.

About the ATMOSPHÈRE Cabin
The new ATMOSPHÈRE cabin sets new standards of passenger experience in the regional jet market segment. Key features of the new interior are comprised of larger passenger living space, wheel-first roller bag capability, more spacious lavatory, increased cabin connectivity options, all integrated in a contemporary design and material choices. In fact, the ATMOSPHÈRE cabin design allows passengers to carry and store an “oversized” roller bag within the aircraft cabin bins which minimizes the need to check bags at the counter or the gate. To learn more: DiscoverAtmosphere.com

Chorus Aviation announces acquisition of nine new Bombardier CRJ900 aircraft

Provided by Chorus Aviation/CNW

HALIFAX, Feb. 6, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) today announced that it has entered into a firm purchase agreement with Bombardier Commercial Aircraft to acquire nine CRJ900 regional jet aircraft. These aircraft will be operated by its subsidiary, Jazz Aviation LP (‘Jazz’), under the Air Canada Express brand as per Jazz’s Capacity Purchase Agreement (‘CPA’) with Air Canada. The nine aircraft will be delivered in 2020.

“The addition of these new CRJ900 aircraft is a significant step in modernizing the Jazz fleet with larger aircraft while supporting the continued growth of our leasing revenue,” said Joseph Randell, President and Chief Executive Officer, Chorus. “The economics of this aircraft will enhance our competitive position and our ability to more effectively respond to the needs of our customer and changing market demand.”

“We are delighted that Chorus and Jazz have chosen Bombardier products for the growth and renewal of their fleet. It reaffirms their confidence in the value that the CRJ provides to airlines, said Fred Cromer, President, Bombardier Commercial Aircraft. The CRJ900 aircraft is ideally suited to growing markets and is recognized for its superior performance, economics and passenger comfort.”

These nine 76-seat aircraft will be configured in two classes of service with 12 seats in business class and 64 seats in economy class, including 20 preferred economy seats.

The new aircraft will be equipped with Bombardier’s new ATMOSPHÈRE cabin featuring a larger passenger living space, increased overhead bin capacity, more spacious lavatories, and overall improved aesthetic details to enhance the passenger experience.

Air Canada and Chorus Aviation Finalize Amended and Extended Capacity Purchase Agreement for Jazz Regional Flying

Provided by Air Canada – 4 February 2019

$97.26 million Air Canada equity investment in Chorus reinforces partnership

  • Capacity Purchase Agreement amended and extended by an additional 10 years ending December 31, 2035, securing Jazz’s place in Air Canada’s regional network for the next 17 years;
  • Simplification and modernization of the Jazz fleet, with growth through more, larger-gauge aircraft. The Amendments will include various minimum levels of covered aircraft at different points in time, providing Air Canada the flexibility to optimize its fleet within its network strategy;
  • Continuation of a highly successful pilot mobility agreement that provides Air Canada Express pilots with access to pilot careers at Air Canada on a planned basis.

MONTREAL and HALIFAX, Feb. 4, 2019 /CNW/ – Air Canada (TSX:  AC) and Chorus Aviation Inc. (TSX:  CHR) (“Chorus”), parent company of Jazz Aviation LP (“Jazz”), today confirmed that all conditions have been met and the previously announced amendment and extension of the Capacity Purchase Agreement (CPA) between Air Canada and Jazz has become effective.  As announced on January 14, 2019, the improved CPA is effective retroactively as of January 1, 2019 and extends to December 31, 2035. 

As part of the agreement to amend the CPA, Air Canada has also completed the $97.26 million equity investment in Chorus previously announced on January 14, 2019. Air Canada has acquired 15,561,600 Class B Voting Shares in the capital of Chorus, representing approximately 9.99% of the issued and outstanding Class A Variable Voting Shares and Class B Voting Shares of Chorus on a combined basis. 

 “Our improved CPA with Jazz, including our equity investment in Chorus, deepens an already strong partnership to the advantage of all parties and their stakeholders. It equips Air Canada with additional cost-effective means to compete in the all-important regional market segment and provides long-term stability to Chorus and Jazz. The ultimate beneficiaries of this agreement will be our customers, as it gives us greater flexibility to operate the aircraft best-suited to the communities we serve on convenient schedules, better connecting travellers to Air Canada’s global network,” said Calin Rovinescu, President and Chief Executive of Air Canada.

“We are extremely pleased and proud to have secured this long-term agreement with Air Canada,” said Joe Randell, President and Chief Executive Officer, Chorus.  “The strong alliance with Air Canada ensures a joint strategic response to an ever-changing industry.  The benefits for both parties are significant and position us well for the future.”

Highlights of the CPA Amendment

  • With this amendment, the parties will effectively address increased domestic and international competition, changing market demand, and fluctuating fuel prices, through significant changes that will modernize and up-gauge the fleet. 

  • In total, the 17-year contract will provide Jazz $2.5 billion in minimum contracted revenues, of which $1.6 billion, or 65%, will be generated from aircraft leasing revenue, supporting the continued transformation of Chorus’ business through the migration of CPA earnings to aircraft leasing. The amended CPA will provide for total incremental contracted revenue of $940 million; $310 million in fixed fees and $630 million in aircraft leasing under the CPA;

  • Projected annual savings to Air Canada of approximately $50 million in each of 2019 and 2020, and cumulative savings of approximately $53 million between 2021 and 2025, both as compared to the 2015 CPA frame-work (from both fixed fee and performance incentive reductions); Beyond 2025 – a market competitive fixed fee for the extension period. This supports Air Canada’s Cost Transformation Programs;

  • Chorus will secure preferred partner status on the operation of aircraft with up to 50 seats and Air Canada will consolidate its existing CRJ regional capacity into the Jazz operation; 

  • Air Canada Deputy Chief Executive Officer and Chief Financial Officer, Michael Rousseau, will be appointed to the board of directors of Chorus.

Jazz Aviation Named as one of Canada’s Top Employers for Young People for Seventh Year

Provided by Chorus Aviation Inc/CNW

HALIFAX, Jan. 18, 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 Top Employers for Young People for the seventh year.

“Jazz is honoured to continuously be ranked among the Top Employers for Young People in Canada,” said Colin Copp, President, Jazz. “Bringing young people with new and innovative ideas into our company is vital to our growth. We are proud to be a top choice for talented young people seeking fulfilling career opportunities in aviation.”

Canada’s Top Employers for Young People is an editorial competition organized by Mediacorp Canada Inc.’s Canada’sTop 100 Employers project. This special designation recognizes the employers that offer the nation’s best workplaces and programs for young people starting their careers. Winners are chosen based on the programs and initiatives they offer to attract and retain younger workers.

In selecting Jazz, Mediacorp cited several employee programs offered by the company, including the Jazz Aviation Pathways Program, which provides scholarships and direct employment opportunities to students enrolled in pilot programs at various post-secondary institutions. Jazz was also recognized for offering scholarships to students enrolled in Aircraft Maintenance Engineer (AME) programs at local community colleges and for providing mentoring to apprentice AMEs.

Air Canada Announces Improvements to Capacity Purchase Agreement with Jazz Aviation LP (a subsidiary of Chorus Aviation Inc.) and Equity Investment of $97.26 million in Chorus

Provided by Air Canada/CNW

  • Amendments to existing Capacity Purchase Agreement (CPA) with Jazz will extend duration of the CPA by ten years from January 1, 2026 to December 31, 2035; Amendments are subject to ratification of a tentative collective agreement between Jazz and ALPA on behalf of its pilots.
  • Amendments will simplify and modernize Jazz’s fleet and provide additional regional fleet flexibility for Air Canada; Projected annual CPA savings of $50 million in each of 2019 and 2020 from both fixed fee and performance incentive reductions.
  • Upon Amendments becoming effective, Air Canada will make an equity investment of $97.26 million in Chorus and Michael Rousseau, Deputy Chief Executive Officer and Chief Financial Officer of Air Canada, will be appointed to Chorus’ Board of Directors.

MONTREAL, Jan. 14, 2019 /CNW Telbec/ – Air Canada today announced an agreement to amend and extend the Capacity Purchase Agreement (CPA) with Jazz Aviation LP, a wholly-owned subsidiary of Chorus Aviation Inc., under which Jazz currently operates certain regional Air Canada Express flights. The amendments should provide long term stability for Chorus, reaffirming Jazz as Air Canada’s most significant Express carrier well into the future, as well as enabling growth on Chorus’ leasing business through Air Canada’s equity investment and the predictability of Jazz’s cashflow from CPA operations until 2035.  The amendments will bolster the strength and competitiveness of the Air Canada Express brand and its coast-to-coast regional network, and provide significant CPA savings for Air Canada, while optimizing network and fleet flexibility when compared to the current agreement.

“We are very pleased to have arrived at this win-win agreement with Jazz and Chorus, which will give us long-term stability, more competitive cost certainty and the flexibility to modernize the regional fleet for the benefit of our customers. The Amendments will allow us to provide regional services more cost effectively so that we can compete more efficiently, deploying the aircraft best suited for a given regional market and also generate additional traffic to feed our international network,” said Calin Rovinescu, President and Chief Executive of Air Canada. “As further demonstration of Air Canada’s commitment to a successful, long-term partnership, upon the CPA Amendments becoming effective, we will make an equity investment of $97.26 million in Chorus.  In addition to aligning our mutual interests, we believe it represents excellent value for Air Canada shareholders.

“We have jointly seized this unique opportunity to strengthen our long-term partnership for the next 17 years,” stated Joe Randell, President and Chief Executive Officer, Chorus. “We look forward to welcoming Mike Rousseau to our board of directors as his expertise will be truly valuable as we continue to execute on the growth and diversification strategy for Chorus.”

Highlights of the CPA Amendments:

  • Extension of the CPA term by ten years from January 1, 2026 to December 31, 2035;
  • Simplification and modernization of the Jazz fleet with growth through more, larger gauge aircraft. The Amendments will include various minimum levels of covered aircraft at different points in time providing Air Canada the flexibility to optimize its fleet within its network strategy;
  • Continuance of a fixed fee structure, including new terms mitigating risk and market- oriented compensation to make the CPA more competitive given new competitors entering the market;
  • Projected annual savings to Air Canada of approximately $50 million in each of 2019 and 2020, and cumulative savings of approximately $53 million between 2021 and 2025, both as compared to the 2015 CPA frame-work (from both fixed fee and performance incentive reductions); Beyond 2025 – a market competitive fixed fee for the extension period. This supports Air Canada’s Cost Transformation Programs;
  • Continuation of a highly successful pilot mobility agreement that provides Air Canada Express pilots with access to pilot careers at Air Canada on a planned basis;
  • Air Canada will consolidate more of its overall regional capacity into Jazz’s footprint, thereby lowering Air Canada’s overall regional costs in the future;
  • The Amendments will be effective retroactively as at January 1, 2019, subject to a number of conditions, including completion of Air Canada’s equity investment in Chorus and ratification of a new tentative collective agreement between Jazz and the Air Line Pilots Association, International (ALPA), the union representing Jazz pilots.

Highlights of the Equity Investment:

  • Air Canada has agreed to subscribe for 15,561,600 Class B Voting Shares in the capital of Chorus, representing approximately 9.99% of the issued and outstanding Class A Variable Voting Shares and Class B Voting Shares of Chorus on a combined basis. This represents an investment of ~$97,260,000 by Air Canada;
  • The Chorus shares will be issued to Air Canada at a price of $6.25, representing a 5% premium to the five-day volume weighted average price of the shares as of the close of trading on Thursday, January 10, 2019;
  • Air Canada and Chorus will enter into an investor rights agreement under which, among other things, Air Canada will hold the investment shares, for a period of at least 60 months and will participate in Chorus’ dividend reinvestment plan and agree to customary standstill provisions, subject to certain limited exceptions;
  • On closing of the equity investment, Deputy Chief Executive Officer and Chief Financial Officer of Air Canada, Michael Rousseau, will be appointed to the board of directors of Chorus.

Air Canada does not intend to provide further comment pending the ratification process in respect of the tentative agreement between Jazz and ALPA; a news release updating the market will be issued when all the closing conditions to the completion of the foregoing transactions are met.

Caution Regarding Forward-Looking Information 
This news release contains forward-looking statements within the meaning of applicable securities laws, including but not limited to, the timing of the coming into force of the CPA Amendments and the completion of the Equity Investment, the proposed appointment of Mr. Michael Rousseau to the board of directors of Chorus and the entering into of the Investor Rights Agreement. Forward-looking statements, by their nature, are based on assumptions and are subject to important risks and uncertainties. Forward-looking statements cannot be relied upon due to, amongst other things, changing external events and general uncertainties of the business. Actual results may differ materially from results indicated in forward-looking statements due to a number of factors. The coming into force of the CPA Amendments and the completion of the Equity Investment are subject to a number of conditions and there are no assurances that they will be completed as described in this news release or at all, or that they will deliver any projected benefits. Any forward-looking statements contained in this news release represent expectations as of the date of this news release and are subject to change after such date. However, except as required under applicable securities regulations, any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, is disclaimed.

Chorus Aviation Announces Agreement to Amend and Extend Capacity Purchase Agreement and a $97.26 Million Equity Investment by Air Canada

Provided by Chorus Aviation/CNW

  • Capacity Purchase Agreement (“CPA”) to be amended and extended by an additional 10 years ending December 31, 2035, securing Jazz’s place in Air Canada’s regional network for the next 17 years.
  • $940 million in incremental contracted CPA revenue with overall contracted revenue growing to $2.5 billion over the term of the amended agreement net of near-term fixed fee reductions.
  • Reinforcement of strategic partnership through a $97.26 million equity investment in Chorus by Air Canada.
  • Proceeds from the Air Canada investment will enable Chorus to invest in its leasing business, including the purchase of new larger-gauge aircraft that will generate additional lease revenue under the CPA. 
  • Amended CPA to significantly reduce margin risk for Jazz by limiting exposure on controllable costs to a maximum of $2 million annually. 
  • Chorus expects to continue to generate cash flow to support its current dividend.
  • Enhanced pilot mobility agreement to provide Jazz pilots with access to pilot careers at Air Canada.
  • Transactions are subject to certain material conditions precedent to closing.

HALIFAX, Jan. 14, 2019 /CNW/ – Chorus Aviation Inc. (TSX: CHR) (“Chorus”), parent company of Jazz Aviation LP (“Jazz”), today announced the parties’ agreement to amend and extend the capacity purchase agreement (“CPA”) between Jazz and Air Canada and complete a $97.26 million equity investment by Air Canada in Chorus.  This agreement will extend the CPA to 2035, creating the longest term strategic partnership between Jazz and Air Canada thus far.

Four years after the last highly-successful amendment to the CPA, the two parties are again taking steps to ensure the long-term competitiveness and strength of their alliance.  With this amendment, the parties will effectively address increased domestic and international competition, changing market demand, and fluctuating fuel prices, through significant changes that will modernize and up-gauge the fleet. Chorus and Air Canada have today seized this opportunity to reinforce their strategic partnership.

“This mutually beneficial agreement, proactively and collaboratively, addresses the need to adapt to a challenging, competitive and ever-changing environment,” said Joe Randell, President and Chief Executive Officer, Chorus.  “Our solid track record of finding solutions for the long-term benefit of Chorus stakeholders has once again delivered an even stronger relationship with Air Canada for the next 17 years.  We seized this opportunity to secure an industry-leading time horizon in support of our valued customer; a clear demonstration that the strategic partnership between Chorus and Air Canada is strong.  This amended arrangement will provide certainty and predictability for our shareholders, employees and other stakeholders.  Chorus expects to continue to generate cash flow to support the current dividend and remains committed to building additional value with continued growth in our leasing business, which is further enabled with this deal.”

“Air Canada is deepening its partnership with Chorus through an improved CPA agreement for Jazz flying and our equity investment in Chorus. These will strengthen our respective companies to the benefit of employees, investors and, most importantly, our customers, by enabling us to modernize our regional fleet and respond more nimbly to evolving market conditions and to remain ahead of our competitors,” said Calin Rovinescu, President and Chief Executive of Air Canada.

The agreement upholds a history of successfully responding to an ever-changing industry and is extended to December 31, 2035 securing Jazz’s place in Air Canada’s regional network under the following key terms:

  • Chorus and Air Canada become true allies in the aviation industry and reinforce their strategic partnership through a $97.26 million equity investment in Chorus by Air Canada. Air Canada will subscribe for 15,561,600 Class B Voting Shares in the capital of Chorus by way of a private placement for $6.25 per share, which represents a 5.0% premium to the five-day volume weighted average price as of the close of trading on Thursday, January 10, 2019. On closing, it is anticipated that Air Canada will hold approximately 9.99% of Chorus’ issued and outstanding Class A Variable Voting Share and Class B Voting Shares on a combined basis. The Toronto Stock Exchange (“TSX”) has conditionally approved the issue of the Class B Voting Shares pursuant to the private placement subject to customary conditions.
  • Chorus will use approximately 60% of the investment proceeds to purchase nine additional new larger-gauge CRJ900 (76-seat) aircraft to modernize Jazz’s fleet and generate additional lease revenue under the CPA. Chorus has conditionally secured the ability to purchase the CRJ900s.The remaining balance will be deployed by Chorus to acquire and lease aircraft outside of the CPA.
  • Chorus and Air Canada will enter into an investor rights agreement governing the terms of Air Canada’s investment in Chorus. Air Canada will have a seat on Chorus’ board and will nominate Michael Rousseau, Air Canada’s Deputy Chief Executive Officer and Chief Financial Officer to the position. Air Canada will, subject to certain limited exceptions, hold its investment for at least 60 months and support Chorus’ growth strategy through participation in the dividend reinvestment plan and adherence to customary standstill provisions. Air Canada will also have pro rata pre-emptive rights to maintain its ownership percentage in Chorus.
  • In total, the 17-year contract will provide $2.5 billion in minimum contracted revenues of which $1.6 billion, or 65%, will be generated from aircraft leasing revenue, supporting the continued transformation of Chorus’ business through the migration of CPA earnings to aircraft leasing.
  • The amended CPA will provide for total incremental contracted revenue of $940 million; $310 million in fixed fees and $630 million in aircraft leasing under the CPA.
  • Incremental fleet acquisitions will provide Chorus significant tax shield and cash tax deferrals through increased tax depreciation deductions.
  • Air Canada will achieve cost savings related to fixed fee reductions, predominantly occurring in 2019 and 2020 with a $36 million decrease in each year, as Chorus reduces its above-market fixed fee rates, carried over from its legacy agreement. Maximum available performance incentives will reduce to levels more consistent with market norms and, assuming attainment consistent with historical performance, performance incentive revenue will decrease by an estimated $12 to $14 million in each of 2019 and 2020.
  • The near-term fixed fee and performance incentive revenue reductions are significantly more than offset by incremental aircraft leasing revenue under the CPA, starting in 2020, and the extended term to 2035.
  • The amended CPA will significantly reduce margin risk for Jazz by limiting exposure on controllable costs to a maximum of $2 million annually.
  • Air Canada will consolidate more of its overall regional capacity into Jazz’s footprint, thereby further securing Jazz’s place in Air Canada’s regional network.
  • The minimum Covered Fleet of 105 aircraft to 2025 and a minimum of 80 75-seat aircraft between 2026 and 2035 will provide a predictable minimum contracted revenue stream for 17 years.
  • Five CRJ900s sourced by Air Canada will initiate the fleet changes with deliveries expected to begin in the first half of 2019.
  • Chorus will secure preferred partner status on the operation of aircraft with up to 50 seats through a right to match third-party offers, thus enhancing growth opportunities.
  • Enhanced pilot mobility agreement that will provide Jazz pilots with access to pilot careers at Air Canada.
  • Chorus expects to continue to generate cash flow to support the current dividend.

Given the 10-year extension in the amended CPA, Jazz and its employees will benefit from greater certainty of operations.

The amendments to the CPA and the investment by Air Canada are conditional on each other and remain subject to a number of terms and conditions precedent to closing, including the ratification of amendments to the collective agreement tentatively agreed between Jazz and its pilots, as represented by the Air Line Pilots Association International (“ALPA”), and satisfaction of the conditions contained in the TSX’s conditional listing approval. The Jazz Master Executive Council of ALPA has started the ratification process which is expected to be completed by February 1, 2019.  If all conditions are satisfied, the CPA amendments will become effective January 1, 2019.