Post by
Adventurous on Apr 12, 2021 11:56pm
For Chorus, Post-Covid Starts June 1
The federal agreement with Air Canada states that regional operations need to be back in place June 1st at the latest.
Chorus is emerging from Covid with a not-so-bad financial health, a renewed agreement with Air Canada making CHR its sole regional operator and with potentially a bright future on the international leasing side. Chorus has the technicians to check and revamp all these planes which did not fly for over a year and will shortly start receiving the delayed payments for the leasing of its planes to third-parties.
But do not hold your breath for a dividend. Chorus will likely take up the federal aid to replace some of its regular-interest debt (6% +) by federal 1% debt and rebalance its financial position. This will mean frozen CEO salary and no dividend for a while. Then Chorus will see if it can grow its position in the leasing market and focus its attention on restarting regular operations.
I would see a dividend in at least a year from now, debt repayment coming first. Also, it will all depend if the new CHR wants to be a growth story (stock appreciation) rather than a cash-cow story (dividends). My take: depending of what lies ahead, Chorus might be pushed into a growth spiral it would need money to feed, with no idle surplus to spare as dividends.
Comment by
Tedious16 on Apr 13, 2021 7:06am
I think Adventurour that you are right on here. I think the CEO is a builder and will see the opportunity to grow, and with access to cheap debt and a world where aircraft are discounted right now, he will be looking for deals.