Q3 2026 Chorus Aviation Inc. Financial Statements

‌Third Quarter 2o26

Unaudited Interim COndenSed ConSolidateg Financial Statements

ChOFuS Aviation II3C.

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

(expressed in thousands of Canadian dollars)

Equity Attributable to Shareholders

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

‌(expressed in thousands of Canadian dollars, except earnings per share)

Three months ended September 30, Nine months ended September 30,

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

‌(expressed in thousands of Canadian dollars)

Three months ended September 30, Nine months ended September 30,

Net income 15,648 10,666 36,473 62,036

Items that will not be subsequently reclassified to the statements of income

Actuarial (loss) gain on employee benefit liabilities, net of tax (recovery) expense of $(900) and

$2,802 (2025 - $3,727 and $3,935) (2,434) 9,989 7,580 10,548

Items that will be subsequently reclassified to the statements of income

Exchange differences on translation of foreign

operations (4) (601) 25 1,007

Comprehensive income 13,210 20,054 44,078 73,591

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

(expressed in thousands of Canadian dollars)

Three months ended September 30, Nine months ended September 30,

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

(expressed in thousands of Canadian dollars, except shares, share prices and earnings per share)

Chorus Aviation Inc. is a holding company with various aviation interests incorporated on September 27, 2010, pursuant to the Canada Business Corporations Act. Its registered office is located at 100 King Street West, 1 First Canadian Place, Suite 6200, P.O. Box 50, Toronto, Ontario, M5X 1B8 and its country of domicile is Canada.

The accompanying consolidated financial statements (the "financial statements") are of Chorus Aviation Inc. References to "Chorus" in the following notes to the consolidated financial statements refer, as the context may require, to one or more of Chorus Aviation Inc. and its current and former subsidiaries.

Chorus' primary business activities include contract flying, aircraft leasing, aviation services, and pilot training. Aviation services include maintenance, repair and overhaul services, parts distribution, aircraft modification, engineering and certification services, and defence and agency services.

Contract flying operations are conducted through both its Jazz Aviation LP ("Jazz") and Voyageur Aviation Corp. ("Voyageur") subsidiaries. Through Jazz's operations, Chorus provides a significant part of Air Canada's domestic and transborder network. Jazz and Air Canada are parties to an amended and restated capacity purchase agreement dated January 1, 2015, most recently amended effective January 1, 2021 and previously amended and restated on January 1, 2019 (the "CPA"), under which Air Canada purchases substantially all of Jazz's fleet capacity at pre-determined rates. As Chorus derives a majority of its revenue from the CPA, it is substantially dependent on Air Canada (refer to note 12 -Economic dependence for further details). Jazz also operates charter flights for a variety of customers. Voyageur provides specialized contract ACMI (aircraft, crew, maintenance and insurance) flying, such as medical, logistical and humanitarian flights, to international and domestic customers.

Chorus formally launched Cygnet Aviation Academy LP ("Cygnet") on March 28, 2023, a pilot academy in Canada, that through an arrangement with CAE Inc., enables cadets to achieve their Integrated Airline Transport Pilot License and acquire an airline specific type rating.

On August 28, 2025, Chorus acquired all of the outstanding shares of Elisen & Associates Inc. ("Elisen"). Elisen provides aerospace engineering and certification services.

On April 1, 2026 Chorus acquired all of the outstanding shares of KADEX Aero Supply Ltd. ("KADEX"). KADEX is an independent distributor of original equipment manufacturers ("OEM") aircraft parts, supplies, and repair and overhaul services.

These financial statements are in compliance with International Accounting Standards ("IAS") 34, Interim Financial Reporting. Accordingly, certain information included in annual financial statements prepared in accordance with International Financial Reporting Standards ("IFRS Accounting Standards"), as issued by the International Accounting Standards Board ("IASB"), have been omitted or condensed. The preparation of financial statements in accordance with IAS 34 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying Chorus' accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, have been set out in note 4 of Chorus' annual consolidated financial statements for the year ended December 31, 2025. These financial statements should be read in conjunction with Chorus' consolidated financial statements for the year ended December 31, 2025.

These financial statements have been authorized for issuance by Chorus' Board of Directors on November 9, 2026.

(expressed in thousands of Canadian dollars, except shares, share prices and earnings per share)

Except as otherwise indicated hereunder, these financial statements have been prepared using the same policies and methods of computation as the annual consolidated financial statements of Chorus for the year ended December 31, 2025.

The preparation of financial statements in conformity with generally accepted accounting principles in Canada ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates.

Business combinations

Chorus applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of an entity is equal to the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the group. Under the acquisition method, the acquiring company adds to its statement of financial position the estimated fair value of the acquired company's assets and assumed liabilities. There are various assumptions made when determining the fair value of the acquired company's assets and assumed liabilities.

The initial recognition of intangible assets acquired that require critical accounting estimates are customer relationships and trade name. To determine the fair value of these intangible assets, a discounted cash flow methodology was used. Significant assumptions were made, which include, among others, the determination of projected revenues and margins, customer retention rates and discount rates.

The customer relationships is an intangible asset with a finite life and will be amortized over 10 years and the trade name is an indefinite life asset and will not be amortized.

IFRS 9 - Classification and Measurement of Financial Instruments

On January 1, 2026, Chorus adopted the amendments to IFRS 9, Classification and Measurement of Financial Instruments and IFRS 7, Financial Instruments using the retrospective without restatement of prior period method. In applying these amendments, Chorus did not elect the optional exemption to recognize electronic fund transfer payments at the date of initiation; instead, such payments are recognized on the date of settlement. Except for an impact on the opening cash flow statement, the adoption of the amendments had no material impact on its consolidated financial statements.

In May 2024, the IASB issued Amendments to the Classification and Measurement of Financial Instruments which amends IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures (the "Amendments"). These Amendments provide clarity on the timing of recognition and derecognition of financial assets and liabilities, the assessment of contractual cash flow characteristics, and the resulting classification and disclosure of financial assets with environmental, social, and governance linked or other contingent features. Additionally, the Amendments clarify that a financial liability is derecognized on the settlement date, with the accounting policy choice to derecognize financial liability settled using an electronic payment system before the settlement date, provided specific conditions are met. Additional disclosures are required for financial instruments with contingent features and investments in equity instruments designated at fair value through other comprehensive income with these Amendments.

(expressed in thousands of Canadian dollars, except shares, share prices and earnings per share)

IFRS 18 - Presentation and Disclosure in Financial Statements

The IASB has issued IFRS 18, the new standard on presentation and disclosure in financial statements, with a focus on updates to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to: the structure of the statement of profit or loss; required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity's financial statements (that is, management-defined performance measures); and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general.

IFRS 18 will replace IAS 1; many of the other existing principles in IAS 1 are retained, with limited changes. IFRS 18 will not impact the recognition or measurement of items in the financial statements, but it might change what an entity reports as its 'operating profit or loss'.

IFRS 18 will apply for reporting periods beginning on or after 1 January 2027 and also applies to comparative information. Chorus is currently evaluating the new standard for any potential impact on the consolidated financial statements.

On April 1, 2026, Chorus purchased all of the outstanding shares of KADEX, an original equipment manufacturer of aircraft parts and supplies distributor focused on the turboprop market, for a purchase price of $51,825. The acquisition of KADEX strengthens its aviation, aerospace and defence operating platform by expanding its aircraft parts distribution and component repair capabilities. At closing, Chorus funded $42,755 through the operating credit facility and cash on hand. The remaining purchase price is subject to customary adjustments and includes contingent consideration dependent on KADEX's achievement of certain future performance targets payable over the next two years. The consideration payable was recorded at the fair value on the date of acquisition at a discount rate of 6.20% and is non-interest bearing.

Chorus uses the acquisition method to account for business combinations. As such, the results of operations include revenue and expenses of KADEX since April 1, 2026. Revenue of $17,739 and $34,128 and net income of $812 and

$1,990 was included in the consolidated statement of income since the acquisition date for the three and nine months ended September 30, 2026, respectively. If KADEX had been part of the Chorus consolidated group since January 1, 2026, the nine months ended September 30, 2026 consolidated revenue and net income would have been $1,036,599 and $37,854, respectively.

Chorus recorded acquisition costs of $20 and $741 in the statement of income for the three and nine months ended September 30, 2026, respectively, mainly due to professional fees.

(expressed in thousands of Canadian dollars, except shares, share prices and earnings per share)

The purchase price has been allocated on a preliminary basis to the assets acquired and the liabilities assumed based on their estimated fair values as follows:

Chorus will finalize the purchase price allocation upon completion of its review of the fair values of the tangible and intangible assets acquired, as such, the purchase price allocation is provisional and subject to change within the measurement period which will not extend beyond one year from the acquisition date. The fair values of the intangible assets were determined with the assistance of independent valuation specialists.

As part of the preliminary purchase price allocation, identifiable intangible assets were recognized separately from goodwill and include customer relationships and the KADEX trade name, reflecting their estimated acquisition-date fair values. Preliminary goodwill is primarily attributable to the present value of expected future economic benefits and the assembled workforce of KADEX that do not qualify for separate recognition as identifiable assets. As all of the outstanding shares of KADEX were acquired, intangible assets and goodwill are not deductible for tax purposes.

(expressed in thousands of Canadian dollars, except shares, share prices and earnings per share)

Chorus earns revenue from contracts with customers in addition to aircraft leasing.

Three months ended September 30,

Nine months ended September 30,

1. Jazz earned a fixed margin of $10,979 and $32,936 for the three and nine months ended September 30, 2026, respectively ($14,932 and $45,052 for the for the three and nine months ended September 30, 2025, respectively) based on the number of covered aircraft operated by Jazz under the CPA. The fixed margin does not vary based on flight activity.

2. Revenue relating to lease income (including any rights to use specified aircraft that have been identified as lease revenues embedded in the CPA and contract flying service agreements).

All revenue from external customers is earned in Canada, based on where the customer carries on business.

A significant customer is one that represents 10% or more of revenue earned during the period. For the three and nine-months ended September 30, 2026 and September 30, 2025, Chorus reported revenue from one significant customer. See note 12 "Economic dependence" for a discussion of transactions between Chorus and Air Canada.

During the three and nine months ended September 30, 2026, Chorus sold one and seven aircraft to a third party for proceeds of $10,033 and $68,390, respectively. The net book value of the aircraft removed from property and equipment was $7,813 and $63,695, respectively resulting in a gain of $2,220 and $4,695, respectively for the three and nine months ended September 30, 2026.

(expressed in thousands of Canadian dollars, except shares, share prices and earnings per share)

Chorus has a $150,000 operating credit facility. On February 9, 2026, Chorus amended the operating credit facility to extend the maturity date to January 29, 2029.

The operating credit facility provides Chorus and certain designated subsidiaries with a committed limit of up to $150,000, subject to a borrowing base calculation, plus a $50,000 uncommitted accordion feature. As at September 30, 2026, the borrowing base calculation supported a limit of $150,000. Letters of credit issued by Chorus under this facility further reduce the amount available under the facility.

As at September 30, 2026, Chorus had drawn $nil on the facility and had provided letters of credit totaling $9,529 that reduce the amount available under this facility.

The facility bears interest for Canadian dollar advances at Canadian Prime plus 1.50% - 2.50% or Canadian Overnight Repo Rate Average ("CORRA") plus a credit spread adjustment plus 2.50% - 3.50%, and for US dollar advances at Base Rate plus 1.50% - 2.50% or Secured Overnight Financing Rate ("SOFR") plus a credit spread adjustment plus 2.50% -3.50%.

The operating credit facility is secured by all present and after-acquired personal property of Chorus and certain designated subsidiaries, excluding certain specified assets such as aircraft and engines and the equity securities of certain specified entities. Any outstanding balance under this facility is immediately repayable if Chorus undergoes a change in control without the lender's consent. It contains customary representations, warranties and covenants, including a covenant to maintain a minimum consolidated interest coverage ratio. As at September 30, 2026, Chorus was in compliance with all covenants under this facility.

Chorus has a bi-lateral credit facility which provides a revolving loan in an amount up to the lesser of (a) 50% of the current market value of certain unencumbered aircraft pledged as security for the loan, and (b) $50,000. On February 9, 2026, Chorus amended the bi-lateral credit facility to extend the maturity date to January 29, 2029. As at September 30, 2026, Chorus had drawn $nil on the facility.

Borrowings bear interest for Canadian dollar advances at Canadian Prime plus 2.50% or CORRA plus a credit spread adjustment plus 3.50%, and for US dollar advances at Base Rate plus 2.50% or SOFR plus a credit spread adjustment plus 3.50%, and are secured by the aircraft pledged as security together with the related leases and insurance proceeds. The loan agreement contains customary representations, warranties, covenants and events of default, and is cross-defaulted to any event of default under the operating credit facility. As at September 30, 2026, Chorus was in compliance with all covenants under this facility.

(expressed in thousands of Canadian dollars, except shares, share prices and earnings per share)

The effective income tax rate on Chorus' earnings before income tax differs from the expected amount that would arise using the combined statutory income tax rates. A reconciliation of the difference is as follows:

Three months ended September 30,

1. Chorus has tax deductible amounts of approximately $201,979 as at September 30, 2026, related to capital cost allowance on eligible capital property. In accordance with the initial recognition exemption, as outlined in IAS 12 Income Taxes, the benefit of these deductible expenditures cannot be recognized in the financial statements until such time as those benefits can be applied to reduce current tax expense. During the nine-month periods ended September 30, 2026 and September 30, 2025, Chorus utilized a total of $11,191 ($3,020 tax effected) and $12,034 ($3,269 tax effected), respectively, of these previously unrecognized tax deductions to reduce its taxable income.

2. The impact of capital items is mainly related to the foreign exchange fluctuations on the long-term debt associated with the aircraft. The impact of the non-deductible portion of any unrealized (gain) loss is recognized in the calculation of income tax expense at the end of each period. To the extent that a loss is recorded for accounting purposes, the benefit of the deductible portion of the capital loss, which does not expire, is recognized only to the extent that it is probable that the loss will be utilized. Income tax expense related to unrealized foreign exchange gains recorded in a period is reduced by previously unrecognized income tax assets related to unrealized foreign exchange losses. Chorus does not currently have a plan in place to utilize the gross capital loss balance of $336,384 related mainly to foreign exchange losses. Accordingly, no deferred tax asset has been recognized related to these capital losses.

(expressed in thousands of Canadian dollars, except shares, share prices and earnings per share)

On June 25, 2025, Chorus announced the declaration of a quarterly cash dividend of $0.08 per common share.

On February 12, 2026, Chorus announced an increase to its quarterly cash dividend from $0.08 to $0.11 per common share.

Chorus' Board of Directors reserves the right to determine whether to pay dividends in the future and the amount, timing and frequency of any such dividends having regard to the Corporation's results of operations and financial condition and other factors as the directors of the Corporation consider appropriate from time to time, including compliance with the covenants contained in Chorus' debt agreements.

For the three and nine months ended September 30, 2026, Chorus declared common share dividends of $2,428 and

$7,486, respectively (2025 - $nil and $2,058, respectively).

For the three and nine months ended September 30, 2026, Chorus paid common share dividends of $2,428 and $7,486, respectively (2025 - $2,058 and $2,058 respectively).

1. Common shares Authorized:

   An unlimited number of Class A variable voting shares, no par value ("Variable Voting Shares"); and

   	Number of Shares	$
   Shares issued and outstanding December 31, 2024	27,175,310	394,774
   Shares repurchased and cancelled under normal course issuer bid	(1,226,755)	(18,046)
   Share repurchase commitment under the automatic share purchase plan	-	4,981
   Shares repurchased and cancelled under substantial issuer bid	(2,533,174)	(37,666)
   Shares issued and outstanding December 31, 2025	23,415,381	344,043
   Shares repurchased and cancelled under normal course issuer bid	(1,460,378)	(21,457)
   Share repurchase commitment under the automatic share purchase plan	-	(5,015)
   Shares issued and outstanding September 30, 2026	21,955,003	317,571

   An unlimited number of Class B voting shares, no par value ("Voting Shares") Issued and outstanding:

   Normal course issuer bid ("NCIB")

   On February 12, 2026, Chorus received approval from the Toronto Stock Exchange ("TSX") to renew the NCIB. Under the NCIB, Chorus may acquire up to a maximum of 1,963,003 of its shares, or approximately 10% of the public float of common shares as of February 6, 2026. The NCIB expires on February 17, 2027.

   During the nine months ended September 30, 2026 Chorus purchased 1,460,378 common shares under the NCIB for total consideration of $36,833. Common share capital was reduced by a net amount of $21,457 and the remaining

   $15,376 was accounted for as a reduction of contributed surplus. Chorus also recognized share buyback tax of $736 as a charge to contributed surplus for the repurchase of common shares. During the nine months ended September 30, 2025 Chorus purchased 1,226,755 common shares, respectively under the NCIB for total consideration of $25,262. The net reduction to equity, after applying the accounts payable accrual at December 31, 2024 of $7,348, was $17,914. Common share capital was reduced by a net amount of $13,065 and the remaining $4,849 was accounted for as a reduction of contributed surplus.

   (expressed in thousands of Canadian dollars, except shares, share prices and earnings per share)

   10 Capital stock (continued)

In connection with the NCIB, Chorus has established an automatic securities purchase plan ("the Plan") with a designated broker to allow for the purchase of common shares. Chorus' designated broker may purchase common shares under the Plan on any trading day during the NCIB during pre-determined trading blackout periods, subject to certain parameters as to price and number of common shares. The Plan will terminate when the NCIB terminates, unless terminated earlier in accordance with the terms of the Plan. As at September 30, 2026, an obligation for the repurchase of shares of $10,448 (as at December 31, 2025 - $nil) was recognized under the Plan, of which $5,015 (2025 - $nil) represents a reduction in share capital and the remaining $5,433 (2025 - $nil) was accounted for as a reduction of contributed surplus.

1. Warrants

   	Number of warrants	$
   Outstanding, December 31, 2024	18,642,772	24,366
   Outstanding, December 31, 2025	18,642,772	24,366
   Outstanding, September 30, 2026	18,642,772	24,366

   As at September 30, 2026, each warrant outstanding is exercisable to purchase one-seventh of a common share at an exercise price of $31.71 per common share and an expiry date of May 3, 2029. The exercise price is subject to adjustment in accordance with the terms of relevant warrant indenture.

2. Preferred shares Authorized:

   Chorus is authorized to issue up to 80,750,000 preferred shares issuable in series, with the designation, rights, privileges, restrictions and conditions attaching thereto determined, subject to any limitations set out in Chorus' articles, by the directors of Chorus.

3. Earnings per share

   The following table provides a breakdown of the numerator and denominator used in the calculation of earnings per common share and diluted earnings per common share.

   Three months ended September 30, Nine months ended September 30,

   2026 $		2025 $	2026 $	2025 $
   Numerator
   Net income	15,648	10,666	36,473	62,036
   Denominator
   Weighted average number of common shares	22,273,490	25,654,920	22,836,546	26,236,388
   Weighted average dilutive common shares in respect of stock-based compensation plans	586,678	411,167	577,559	406,234
   Weighted average number of diluted common shares	22,860,168	26,066,087	23,414,105	26,642,622

   (expressed in thousands of Canadian dollars, except shares, share prices and earnings per share)

   ‌11 Financial instruments and fair values

Financial assets and liabilities have been classified into categories that determine their basis of measurement and for items measured at fair value, whether changes in fair value are recognized in the statement of income or comprehensive income. Those categories are: fair value through profit or loss; fair value through other comprehensive income; and amortized cost. With the exception of the items noted below, all financial instruments have fair value that approximate carrying value due to their short-term nature.

Chorus' financial instruments consist of cash, accounts receivable, long-term defined benefit pension receivable, finance lease receivables, foreign currency contracts, total return swap, accounts payable and accrued liabilities, long-term incentive plan liability, long-term debt, consideration payable and lease liabilities.

‌The carrying amounts reported in the statement of financial position for cash, accounts receivable and accounts payable and accrued liabilities approximate fair values based on the immediate or short-term maturities of these financial instruments. Assets and liabilities, such as commodity taxes and deferred lease inducements, that are not contractual and that arise as a result of statutory requirements imposed by governments, do not meet the definition of financial assets or financial liabilities and are therefore excluded.

The following shows the fair value of other financial assets and liabilities compared to carrying value:

As at September 30, 2026 As at December 31, 2025

The transactions between Air Canada and Chorus are summarized in the table below:

Three months ended September 30, Nine months ended September 30,

The following current balances with Air Canada are included in the financial statements:

(expressed in thousands of Canadian dollars, except shares, share prices and earnings per share)

1. Net changes in non-cash balances related to operations:

   Three months ended September 30,

   Nine months ended September 30,

   	2026 $	2025 $	2026 $	2025 $
   (Increase) decrease in accounts receivable - trade
   and other	(22,521)	(13,548)	2,353	33,725
   (Increase) decrease in inventories	(1,718)	1,311	3,045	2,826
   Decrease (increase) in prepaid expenses	998	1,471	(879)	1,995
   Decrease (increase) in income tax receivable	2,768	(8,851)	4,703	(8,837)
   Decrease (increase) in other long-term assets	1,923	159	(916)	3,918
   Increase (decrease) in accounts payable and
   accrued liabilities	23,041	14,873	20,080	(128,359)
   Increase (decrease) in current portion long-term
   incentive plan	1,844	(451)	8,025	-
   Decrease in income tax payable	(435)	(471)	(431)	(2,600)
   Increase (decrease) in other long-term liabilities	1,228	372	(65)	5,348
   	7,128	(5,135)	35,915	(91,984)

   The above table excludes non-cash foreign currency adjustments.

2. Other

Three months ended September 30,

Nine months ended September 30,

On November 1, 2026, Chorus completed the acquisition of 2080061 ONTARIO INC., carrying on business under the registered business name "SkyCare Air Ambulance" ("SkyCare"), a provider of aviation and medical services headquartered in Sioux Lookout, Ontario, for a purchase price of approximately $40,000. At closing, Chorus funded

$36,142 through the operating credit facility and cash on hand, inclusive of an estimated net working capital adjustment of

$4,142. The remaining purchase price is subject to customary adjustments and includes contingent consideration dependent on SkyCare's achievement of certain future performance targets, payable through to March 31, 2029.