Ruling Upholds Current 12.5% Controllable Mark-Up
Board Continues to Review Opportunities to Further Enhance Shareholder
Value
HALIFAX, Nov. 26, 2013 /CNW/ - Chorus Aviation Inc. ("Chorus") (TSX: CHR.B CHR.A CHR.DB) received confirmation today that the decision in the arbitration
relating to the benchmarking provisions in the Capacity Purchase
Agreement ("CPA") with Air Canada will not result in changes to the
controllable cost mark-up (the "Controllable Mark-up") that Jazz
Aviation LP ("Jazz") receives from Air Canada.
A majority of the arbitration panel agreed with Jazz that there is no
justification to change the current 12.5% mark-up, and therefore, Jazz
has no obligation to pay retroactive amounts to Air Canada. All other
contractual provisions of the CPA are unchanged and will continue to
provide clarity on Jazz's revenues going forward.
"We are pleased that the arbitration panel has ruled in favour of Jazz
and that we can now move forward with certainty," said Joseph Randell,
President and Chief Executive Officer, Chorus and Jazz. "Our long-term
partnership with Air Canada continues to be a core component of our
business, and we believe this ruling provides us with additional
flexibility to continue to operate as an industry leader and deliver
value for all our stakeholders. Given Chorus' strong cash flow profile
and liquidity position resulting from this arbitration decision, the
Board is committed to maintaining the current annual dividend of $0.30
per share as it reviews all alternatives to further enhance shareholder
value."
"We've heard and understand Air Canada's desire to reduce the cost of
its regional services," continued Mr. Randell. "Over the past several
months we have developed a framework of strategic options that seeks to
address Jazz's cost structure while maintaining our industry-leading
operations, and foster a more effective partnership. This framework is
based on a series of win-win propositions that could strengthen Jazz
and Air Canada in the North American market, create additional value
for all our respective stakeholders, and solidify our future in Air
Canada's network. We look forward to engaging with Air Canada on these
meaningful and achievable initiatives."
Chorus remains focused on prudently managing its financial resources
with the goal of enhancing value for all stakeholders, including Air
Canada and its passengers, as well as our employees. As such, the
Chorus Board of Directors and management team continuously review their
capital allocation strategy, seeking to maintain an appropriate balance
between reducing debt, investing in the business and returning capital
to shareholders.
Forward Looking Statements
Certain statements in this news release may contain statements which are
forward-looking. These forward-looking statements are identified by the
use of terms and phrases such as "anticipate", "believe", "could",
"estimate", "expect", "intend", "may", "plan", "predict", "project",
"will", "would", and similar terms and phrases, including references to
assumptions. Such statements may involve but are not limited to
comments with respect to strategies, expectations, planned operations
or future actions.
Forward-looking statements relate to analyses and other information that
are based on forecasts of future results, estimates of amounts not yet
determinable and other uncertain events. Forward-looking statements, by
their nature, are based on assumptions, including those described
below, and are subject to important risks and uncertainties. Any
forecasts or forward-looking predictions or statements cannot be relied
upon due to, amongst other things, changing external events and general
uncertainties of the business. Such statements involve known and
unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements to differ materially from
those expressed in the forward-looking statements. Results indicated in
forward-looking statements may differ materially from actual results
for a number of reasons, including without limitation, risks relating
to Chorus' relationship with Air Canada, risks relating to the airline
industry, energy prices, general industry, market, credit, and economic
conditions, competition, insurance issues and costs, supply issues,
war, terrorist attacks, epidemic diseases, acts of God, changes in
demand due to the seasonal nature of the business, the ability to
reduce operating costs and employee counts, secure financing, employee
relations, labour negotiations or disputes, restructuring, pension
issues, currency exchange and interest rates, leverage and restructure
covenants in future indebtedness, dilution of Chorus shareholders,
uncertainty of dividend payments, managing growth, changes in laws,
adverse regulatory developments or proceedings, pending and future
litigation and actions by third parties. There are no assurances that
Chorus will enter into or implement new CPA amendments with Air Canada.
The forward-looking statements contained in this discussion represent
Chorus' expectations as of November 26, 2013, and are subject to change
after such date. However, Chorus disclaims any intention or obligation
to update or revise any forward-looking statements whether as a result
of new information, future events or otherwise, except as required
under applicable securities regulations.
About Chorus
Chorus Aviation Inc. was incorporated on September 27, 2010 and is a
dividend-paying holding company which owns Jazz Aviation LP and Chorus
Leasing III Inc.
Chorus is traded on the Toronto Stock Exchange under the trading symbols
of CHR.A, CHR.B and CHR.DB.
For more information, visit www.chorusaviation.ca
About Jazz
Jazz Aviation LP has a strong history in Canadian aviation with its
roots going back to the 1930s. Jazz is wholly owned by Chorus Aviation
Inc. and continues to generate some of the strongest operational and
financial results in the North American aviation industry. 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. The Company
operates more flights and flies to more Canadian destinations than any
other carrier and has a workforce of approximately 4,450 professionals
highly experienced in the challenging and complex nature of regional
operations.
There are two airline divisions operated by Jazz Aviation LP: Air
Canada Express and Jazz.
Air Canada Express: Under a capacity purchase agreement with Air
Canada, Jazz provides service to and from lower-density markets as well
as higher-density markets at off-peak times throughout Canada and to
and from certain destinations in the United States. In November of
2013, Jazz is operating scheduled passenger service on behalf of Air
Canada with approximately 739 departures per weekday to 54 destinations
in Canada and to 25 destinations in the United States. With a fleet of
122 Canadian-made Bombardier aircraft, Jazz flies more daily flights to
the most Canadian destinations than any other carrier
Jazz: Under the Jazz brand, the airline offers charters throughout
North America with a dedicated fleet of five Bombardier aircraft for
corporate clients, governments, special interest groups and individuals
seeking more convenience. Jazz also has the ability to offer airline
operators services such as ground handling, dispatching, flight load
planning, training and consulting.
For more information, visit www.flyjazz.ca.
SOURCE Chorus Aviation Inc.
