RE:RE:RE:RE:RE:Buy, Hold, or Sell?Some people ask what CHR will do with the 19 Dash-8 Air Canada withdrew from service, ignoring the two last press releases announcing three of them are already leased to other new start-up companies. Obviously regional aviation is gaining momemtum in other parts of the world. Don't they know about COVID? But this is only 3 of the 19 planes people insist, forgetting CHR already booked a loss of $68M (pocket change) for all 19 (very unlikely to happen) and forgetting all the benefits CHR is getting from the revised CPA.
Your criticism of my post is fair... if your facts were correct. The 19 Dash 8-300's that were removed from leases with Air Canada were not the 3 Dash 8-400's that had leases announced recently. First of all they are different types of planes. Those 3 Dash 8-400's came from the repossessions of the previous year from Flybe, Virgin Australia etc. It was mentioned in the previous MDA that deadline to remarket those 13 repossessed aircraft (interest free) had be extended to April 24, 2021. Of the 13 they remarketed 3, the 3 dash 8-400's that you mentioned. I'm expecting some more announcements before April 24th but maybe it really is too difficult to find new leases right now (unless you're aercap) and maybe I should be happy with the 3 out of 13 leases they needed to remarket. But I would like to see Chorus strive to be like Aercap or better. What's wrong with wanting to see the company you're invested in striving to be the industry leader?
I do not recall them booking a loss already for 68million can you direct me to the press release where they had mentioned that? Is it because they were on lease and the residual value of the lease was 58 million? but then where is the extra 10million from? Do you really think 68 million is a drop in the bucket for them? if so they would not have done financing for 115 million through the bought deal as that's "only" about double of 68 million. I should remind you that the annual diviidend expense used to be only about 4X million so 68 million would pay over a year's worth of dividends which is not a drop in the bucket.
To begin with the Dash 8-300 are assets, shouldn't be counted as a loss. The loss of the lease contract has already been accounted for though at a net of -10million offset by the increase in the CPA which I believe you mentioned in your message.
As I had mentioned, Chorus estimated 15 of the 19 are valued at 65 million though they didn't clarify exactly how this valuation was derived. Why I want to know how it's valued is to see if i can adjust the numbers upwards. If this advised 65 million is the current average market value of dash 8-300's we can expect the number to increase along with the recovery. But if the valuation was not very conservative then we shouldn't expect any adjustments going forward. I'd assume if they're able to somehow remarket dash 8-300's, as right now i'd assume people would much rather lease the dash8-400's over the 300's, then the NPV of the lease revenue should be even higher than the instant sale of the dash 8 -300's.
They also mentioned conversions to cargo, if they start up a regional air freight business the value could go up even more.
Regardless I would like to see the aircraft put into use as soon as possible. I believe that even though they may not be parked at a public airport there are still storage costs for the planes, and as a shareholder I would like it to be minimal and for chorus' asset utilization rate to be as high as possible. What shareholder wants to see underutilized assets? I don't think any shareholder does.