Jazz

Regional services will lead aviation’s recovery: Chorus

Chorus entered the pandemic in its strongest-ever position. The future is less certain.

An Air Canada Express De Havilland Dash 8-400 departs Vancouver International Airport February 20, 2020 (photo: Brett Ballah).

Chorus Aviation, which does the lion’s share of regional flying for Air Canada, reported some of its best-ever financial results Friday, while also warning of some of the greatest challenges the company has ever faced.

“It’s difficult to know where to begin,” Chorus’ President and Chief Executive Officer Joe Randell to an conference call Friday morning. His company had higher pre-tax profits than in 2019 and had plans for more growth.

“We entered this pandemic from the strongest position in our history,” he said, noting the COVID-19 pandemic has virtually erased any meaning the past has for the present. “We won’t spend much time discussing the first quarter, as most interest is in the near future.”

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The company reported it lost $17 million in the first three months of the year, though the loss was more attributable to international exchange rates than the pandemic.

Not to say Chorus hasn’t been affected by COVID-19. It gets much of its revenue from flying regional services for Air Canada, which has been cut 90% in April and May.

“Prior to this crisis we were flying over 700 daily flights to 90 North American destinations, many of them being remote communities and of which we were the sole air operator,” said Randell. “Today, we’re operating fewer than 60 daily flights and have ceased operations at 36 airports.”

As a result, Chorus has parked 70 regional aircraft and placed some 3,000 staff on ‘inactive’ status. The company has also suspended discretionary spending, cut management salaries, and taken advantage of federal wage subsidies to make ends meet.

“No one can predict how long this crisis will last or what the ultimate impact will be on the aviation industry,” said Randell. “As the recovery unfolds, we believe there will be new opportunities for aircraft leasing as several carriers opt to lease versus purchase aircraft.”

Chorus also leases out dozens of regional aircraft to airlines around the world. Nearly all of its customers have asked for payment deferrals, said Randell.

Since the beginning of March, three airlines that leased planes from Chorus have gone into bankruptcy proceedings. Flybe in Britain, CityJet in Ireland, and Virgin Australia have either ceased operations or entered some form of protection, putting the future of 13 Chorus-owned aircraft into doubt.


At the same time, Chorus executives are starting to see some ‘green shoots’ in Canada’s aviation sector, and believe their short-haul aircraft are well placed to lead the recovery.

“We are seeing short-haul domestic markets come back first,” said Randell, noting countries are willing to open their home markets before they are willing to allow international travel.

He said the experience overseas, notably in China and Europe, shows local capacity using smaller-gauge aircraft will come back long before long-haul routes. He pointed to KLM and Lionair as two examples of airlines that have restarted flying with smaller regional jets.

“At this point, we believe the CRJ 900 aircraft will be an important part of the recovery programme, given its size and economics,” said Randell. “With Bombardier restarting its production line, we now anticipate commencing the delivery of new CRJ900s later this year.”

A Chorus-owned Air Canada CRJ 900 lands at Vancouver International Airport. Chorus believes regional services will lead the rebirth of aviation after the pandemic ends (photo: Brett Ballah).

“We believe air service to small communities is a critical component to stimulating the return of the Canadian economy,” said Randell. “We remain hopeful that the government of Canada will spearhead a collaborative effort amongst all stakeholders in aviation to address the many additional measures required beyond financial support, to ensure the safe and timely reopening of air travel in Canada.”

Chorus adopted a poison pill in late April, hoping to discourage anyone trying to take advantage of the company’s low share price to wrest control from current owners.

“Of the segments of the business,” Randell predicted with some confidence, “we’re the one that’s showing the earliest signs of return.”

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