Chorus: Pilots collective agreementPublished by TD .
Note from Tempo: Remember that a large part of operation of Chorus is to do short flights for AC with an agreement where AC is responsible of the larger part of the costs.
Yesterday after market-close, Chorus announced that Jazz pilots, represented by the Air Line Pilots Association (ALPA), and its Jazz Aviation subsidiary ratified modifications to their collective agreement with an effective date of September 1, 2023. While no financial details were disclosed, importantly the press release noted that the modification will 'not have a financial impact on Chorus'.
Impact: SLIGHTLY POSITIVE
We view the modification positively given that it will not have a financial impact on Chorus, and because it significantly reduces uncertainty related to the outlook for pilot compensation expense in an environment where turnover is unusually high and industry compensation is moving dramatically higher. Prior to the announcement, we were of the view that Chorus would need to modify its collective agreement ahead of 2029 when the agreement allowed for an increase in wages. This view was based on the need for Jazz to remain competitive for pilot talent while slowing pilot turnover. The fact that the modification will not have a financial impact on Chorus implies to us that Air Canada, through its CPA, would be responsible for any increase in costs associated with the modification