Chorus Aviation Inc. · TSX:CHR
Chorus Aviation — Investor Presentation (February 2015)
20 slides from Chorus Aviation's investor presentation, February 2015
Slide 1: New Capacity Purchase Agreement
New Capacity Purchase Agreement Fe brua r y 2 0 1 5
Slide 2: Disclaimer
Disclaimer Caution regarding forward-looking information Certain information in this presentation, and statements made during this presentation, may contain statements which are forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as “antic
Slide 3: Agenda
Agenda The time is right to restructure the CPA Highlights of the new CPA Fleet benefits Key comparisons: Summary of components The value proposition 3
Slide 4: The time is right to restructure the CPA
The time is right to restructure the CPA Air Canada growth creates a unique timing opportunity Previous CPA model not competitive for the long term given the changing competitive landscape Air Canada and Chorus fully aligned on improving cost structure and building a framework for a successful long
Slide 5: Agenda
Agenda The time is right to restructure the CPA Highlights of the new CPA Fleet benefits Key comparisons: Summary of components The value proposition 5
Slide 6: Highlights of the new CPA
Highlights of the new CPA Effective January 1, 2015 Extension through to December 31, 2025 Moves Chorus to a very competitive position in regional sector Significant cost reductions Strengthens relationship with Air Canada Better aligns interests 6
Slide 7: The New CPA: Win – Win for Chorus and Air Canada
The New CPA: Win – Win for Chorus and Air Canada The new CPA allows both parties to achieve and maintain competitive cost structures while securing a more cooperative and stable working relationship. Value to Chorus Value to Air Canada Secure extension of CPA by 5 years to YE2025 Improved networ
Slide 8: New pilot agreement
New pilot agreement Industry-leading 11-year agreement – Greater flexibility with cost competitive structure – Creates long-term stability Currently 85% of Jazz pilots at top of wage scale (based on seniority) Pilot Mobility Agreement allows senior pilots flow up to Air Canada Jazz transitions to a
Slide 9: Agenda
Agenda The time is right to restructure the CPA Highlights of the new CPA Fleet benefits Key comparisons: Summary of components The value proposition 9
Slide 10: Fleet simplification and modernization
Fleet simplification and modernization The Chorus fleet will transition to more efficient, larger aircraft with significant fleet simplification Jazz will transition to a mix of larger, newer technology regional jets (CRJ705s) and turboprops (Q400s) Aircraft 2015 2016 2017 2018 2019 2020 2021 2022 2
Slide 11: New CPA: Fleet Benefits to Chorus
New CPA: Fleet Benefits to Chorus Unlocking the value in the fleet New Q400s: Dash 8 Classics: Existing Q400s: Leveraging Chorus Balance Unlocking Value Solidifying Value Sheet to Enhance Value Reduction of 19 Dash 8- Ensures return for Chorus Minimum addition of 13 100s prior to 2020 enables invest
Slide 12: Agenda
Agenda The time is right to restructure the CPA Highlights of the new CPA Fleet benefits Key comparisons: Summary of components The value proposition 12
Slide 13: Key Comparisons: Summary of components
Key Comparisons: Summary of components Components Prior CPA New CPA Compensation 12.5% mark up on Jazz Moved to a fixed fee compensation structure based on aircraft in fleet and infrastructure controllable costs provided. Compensation value fixed to end of 2020 and then varies by aircraft in fle
Slide 14: Key Comparisons: Summary of components
Key Comparisons: Summary of components Components Prior CPA New CPA Controllable Costs As defined in CPA with certain services The following costs are moved to Pass Through with AC having option to pay Excluding Crew provided by AC billed back as a directly items such as: Costs controllable cost
Slide 15: Chorus compensation under the CPA
Chorus compensation under the CPA Jazz CPA For the For the Average for Average for (Millions CAD$) calendar 12 months calendar years calendar years year ended ended 2015-2020 2021-2025 Dec. 31, 2013 Sept. 30, 2014 CPA Compensation (Note 1) $108.1 $111.8 $109.7 $62.9 CPA Compensating Mark-up -- $3.7
Slide 16: Agenda
Agenda The time is right to restructure the CPA Highlights of the new CPA Fleet benefits Key comparisons: Summary of components The value proposition 16
Slide 17: The value proposition
The value proposition SUSTAINABILITY BEYOND Solid 2025 partnership Strong with Air competitive Canada; position in elimination of regional benchmarking Security to allow industry for growth and diversification Supportable dividend ($0.45 per share) Secure Jazz’s current compensation to 2020 CPA exte
Slide 18: Thank You
THANK YOU Nathalie Megann Director, Corporate Communications and Investor Relations nmegann@chorusaviation.ca (902) 873-5094
Slide 19: Appendix 1: Responsibilities within the CPA
Appendix 1: Responsibilities within the CPA Responsibilities Purchases capacity Provides crews Determines routes Airframe maintenance Flight schedules Flight operations Ticket prices Some airport operations Marketing 19
Slide 20: Appendix 2: Chorus Quarterly Operating Revenue
Appendix 2: Chorus Quarterly Operating Revenue Q1 Q2 Q3 Q4 Q1 Q2 Q3 2013 2013 2013 2013 2014 2014 2014 Operating Revenue: $ $ $ $ $ $ $ (Millions CAD$) Flight revenue including charter 210.6 213.5 222.7 212.0 213.3 218.6 226.7 Aircraft leasing revenue under the CPA 10.0 13.0 13.2 13.5 14.2 14.1 14.0
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