Chorus Aviation Inc.- President and CEO, Joe Randell
President and CEO, Joe Randell
Source: Halifax Chamber of Commerce
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  • Chorus Aviation Inc. (TSX:CHR) is seeing a reduction in passenger numbers, as the COVID-19 outbreak worsens 
  • The company believes its domestic flight agreement with Air Canada and its leasing portfolio will help shield it from market volatility
  • To further strength its balance sheet, Chorus is reducing its planned expenditures to around C$300 million, down from $450 million
  • The company is currently in talks with Air Canada and other leasing partners to renegotiate terms moving forward
  • Chorus Aviation Inc (CHR) is down 22.84 per cent, with shares trading for $1.94 and a market cap of 311.72 million 

Chorus Aviation Inc (TSX:CHR) is seeing passenger numbers fall as the COVID-19 outbreak motivates further travel bans and movement restrictions.

The outbreak has hit airlines around the world, with Air Canada’s CEO pushing for government aid earlier this week. Chorus has an agreement with Air Canada to manage a portion of regional flights.

Chorus believes this agreement, with a large international airline, will provide security in the turbulent months to come. The two companies are in the midst of discussing Air Canada’s schedule changes and requirements.

The agreement stipulates that Chorus is guarded against losses exceeding $2 million.

The company also referenced its leasing portfolio as another form of secured income.

However, when UK airline Flybe went into administration earlier this month, Chorus’ four Flybe-leased aircraft were grounded. This suggests its leasing portfolio is not immune to the challenges currently facing the industry.

Chorus is currently negotiating temporarily relief for some of its leasing customers.

Joe Randell, Chorus President and CEO, remains cautiously optimistic about the upcoming year.

“The disruption to the global airline industry caused by COVID-19 is unprecedented; however, Chorus has entered this crisis stronger than ever.

“We have a collaborative long-term partnership with Air Canada, a well-diversified aircraft leasing portfolio holding high-quality assets. 

“The work we have done in the last few years has positioned us well to manage through this challenging period,” he said.

Due to the market’s instability, the company is reducing its planned expenditures to around C$300 million, down from $450 million.

Chorus Aviation Inc (CHR) is down 22.84 per cent, with shares trading for $1.94 at 2:26am EST.

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