Chorus Aviation Overview September 17, 2020 Chorus is a global provider of integrated regional aviation solutions TSX: CHR
Forward-looking information disclaimer This presentation contains “forward-looking information” as defined under applicable Canadian securities laws. Forward-looking information is 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 information may involve but is not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking information relates 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 information, by its nature, is based on assumptions and is subject to important risks and uncertainties. Any forecasts or forward-looking predictions or statements cannot be relied upon due to, among other things, external events, changing market conditions and general uncertainties of the business. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from those expressed in forward-looking information. Actual results may differ materially from those expressed in this presentation for a number of reasons, including a prolonged duration of the COVID-19 outbreak and/or further restrictive measures to contain its spread, the evolving impact of COVID-19 on Chorus’ contractual counterparties, changes in aviation industry and general economic conditions, the continued payment (in whole or in part) of amounts due under the Capacity Purchase Agreement (CPA), Chorus’ ability to pay its indebtedness and otherwise remain in compliance with its debt covenants, the risk of cross defaults under debt agreements and other significant contracts, the risk of asset impairments and provisions for expected credit losses, the delay or non-delivery of the remaining six new CRJ900 aircraft to Chorus for operation and lease under the CPA, as well as the risk factors identified in Chorus’ most recent Management’s Discussion & Analysis, Annual Information Form and public disclosure record available at www.sedar.com . 2
Ch Chorus i s is s a a gl globa obal provid ider r of in integrated r regio ional avia iatio ion s solu lutio ions 3
Highlights Regio iona nal a l avia iatio ion n is is a resilie ilient nt s sector r of t the he avia iatio ion n 1 ind indus ustry ry sho howing ing firs irst s sig igns ns of r recovery ry during uring econo nomic ic d downt nturn urn Chorus has a pr Ch predi edicta ctabl ble r e reven enue e str trea eam, 2 wit ith h 90%+ o of annua nnual r l revenue nues s secur ured thr hroug ugh lo h long ng-ter erm c contr tract cts and s d str trong g rela latio ions nship hips Cho horus rus is is dif ifferent ntia iated fro rom p pure re pl play aircr craft l t lea easing c g competi petitors du due e 3 to i to its abilit ility t to provid ide a a full s ull suit uite of regio iona nal a l avia iatio ion n serv rvic ices an and ext xtens nsiv ive operatio iona nal e l exp xperie rienc nce 4
Regional aviation is based on aircraft carrying Up t p to 150 50 pa passenge gers 2 main types of Fly shorter distances than Account for ~22% of the regional aircraft Narrow Body jets world’s commercial fleet % of all flights below 500 miles 1 Worldwide aircraft fleet 2 Regional Up to 150 Jets passengers 15 15,80 800 83% 83 50% of 50% of wor orld Bombar bardi dier/ passe ssengers s fly CRJ-200 to CRJ-1000 Mitsubi ubishi hi <500 m 500 miles Embr brae aer E135 to E190 Airbus bus A220-300 37% 7% 5,90 ,900 Turbo Up to 90 props passengers 4,500 00 2,300 00 TP TP 17% 7% De Hav Havilland and Dash 8 – 100 to 400 Jet ets 3,60 ,600 ATR TR ATR 42 to ATR 72 Regional Narrow Wide Turbo Regional Narrow Body Body props Jets Body 1 Officia 2 FlightGlobal (2019), includes in-service aircraft with more than 20 seats ial l Aviatio ion Guid ide ( (2012). Regional aircraft are fundamental to efficient air transport networks and link 60% of the world’s communities 1 5
Contents 1 2 Regional Aviation Chorus’ Business Services 3 4 Regional Aircraft COVID-19 impact on industry Leasing 5 6 Managing the Conclusion impact of COVID-19 7 8 Appendices Appendices Financial statements Supplemental information 6
Our long-term strategy unchanged by near-term challenges Grow our regional aircraft leasing business through aircraft acquisitions, portfolio acquisitions and potential skyline transactions Grow our regional aviation services of contracted flying (wet leasing and leasing under the CPA) Leverage the synergies and technical expertise across our lines of business to further drive diversification and profit 7
Chorus’ business Regional Aviation Services Regional Aircraft Leasing 8
Contents 1 2 Regional Aviation Chorus’ Business Services 3 4 Regional Aircraft COVID-19 impact on industry Leasing 5 6 Managing the Conclusion impact of COVID-19 7 8 Appendices Appendices Financial statements Supplemental information 9
Contracted flying/wet leasing generates largest revenue stream Air Canada Operates scheduled service through a CPA with Express flying Air Canada under the Air Canada Express brand Specialized Provides medical, logistical and contracted humanitarian flight operations to blue chip flying customers globally Offers charters throughout North Charter flights America for corporate clients, governments, special interest groups and individuals 10
Chorus is Air Canada’s pri rimary ry r reg egiona nal part rtner ner (pre C e COVI VID-19) 9) ~690 ~80% 116 Aircraft currently Largest operated by Jazz daily flights Chorus of Air Canada’s 90 regional seat 52 Currently customer capacity leased under N.A. destinations the CPA Responsibilities Air Canada Jazz under the ● Purchases capacity ● Conducts marketing ● Supply of flying crews Capacity Purchase ● Manages routes ● Assumes ● Airframe maintenance commercial risk Agreement ● Sets flight ● Flight operations ● Retains revenues for schedules ● Some airport operations passenger & cargo ● Sets ticket prices ● General administration transport ● Fl Flexibility to r o respond ond qui uickly and nd e efficient ntly t to m o market cha hang nges Benefits for and nd op oppor ortuni unities Air Canada ● Jaz azz man anag ages Air C Can anad ada a Express operat ations at at 3 38 ai airports ac across Can anad ada ● Sour ource of of qua ualified p pilot ots t thr hroug ough h Pilot ot M Mob obility P Prog ogram 11
Maintenance Repair & Overhaul (MRO) and Parts MRO and Parts Facilit ilitie ies Str trategi gic B Benefits ts 6-bay, 80,000 sq. ft. facility, 360 employees ● Performs heavy MRO activities, interior refurbs and LOPA changes, IFE/WIFI ● ● “Strategic Enabler” installs 24/7/365 operation provides flexibility to carriers with industry leading ● ● Provides part sales and component turnaround time repair for leased aircraft Halifax, NS De Havilland Dash-8 100/200/300/400, Bombardier CRJ ● 100/200/700/900/1000, Embraer 135/145 Rated ● Conducts aircraft repossessions, Transport Canada, FAA and EASA approved ● transitions and inspections De Havilland Authorized Service Facility, Bombardier Authorized Service ● Facility ● Facilitates part-out of EOL assets Bombardier/De Haviland and Embraer 135/145 regional aircraft ● 200 000 sq. ft. facility, ~155 employees ● Performs heavy MRO activities, customized designs and engineering and ● ● Provides strategic insight into residual aircraft modifications North Bay, value of potential acquisition Transport Canada, FAA and European Aviation Safety Agency approved ● opportunities ON Transport Canada certified Canadian Design Approval Organization ● Supplemental Type Certificates for Dash 8 100/200/300/400s and Dash 7s ● ● Facilitates relationships with airlines Provides parts provisioning, sales and service for regional aircraft - great ● complement to MRO activities that drive other revenue opportunities 12
Contents 1 2 Regional Aviation Chorus’ Business Services 3 4 Regional Aircraft COVID-19 impact on industry Leasing 5 6 Managing the Conclusion impact of COVID-19 7 8 Appendices Appendices Financial statements Supplemental information 13
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