EXECUTING ON GROWTH January 2019 AND DIVERSIFICATION STRATEGY - PowerPoint PPT Presentation

EXECUTING ON GROWTH January 2019 AND DIVERSIFICATION STRATEGY

CONTENT ▪ CHORUS OVERVIEW ▪ REGIONAL AVIATION SERVICES • 2019 CPA amendments ▪ REGIONAL AIRCRAFT LEASING ▪ APPENDICES • Financial statements • Contracted flying • MRO • Awards • Regional aircraft leasing growth opportunities 2 Delivering regional aviation to the world

NOTICE TO READER This document contains information with respect to: ▪ amendments to, including an extension of, the amended and restated capacity purchase agreement effective January 1, 2015, between Air Canada and Jazz Aviation LP (the “CPA Amendments”), and ▪ an investment by Air Canada in Class B Voting Shares of Chorus Aviation Inc. (the “Investment”) . The coming into force of the CPA Amendments and the completion of the Investment are conditional on each other and are subject to a number of conditions, including ratification of a tentative agreement between Jazz and the Air Line Pilots Association International on behalf of Jazz’s pilots, and satisfaction of the conditions contained in the Toronto Stock Exchange’s conditional listing approval relating to the investment. There are no assurances that the transactions will be completed as described in this presentation or at all, or that they will deliver any projected benefits. All projections use an estimated U.S. to Canadian currency exchange rate of $1.26. 3 Delivering regional aviation to the world

CAUTION REGARDING FORWARD-LOOKING INFORMATION 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, including those described below, 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 the forward-looking information. The coming into force of the CPA amendments and the completion of Air Canada’s equity investment in Chorus are subject to a number of conditions (including ratification of a tentative agreement between Jazz and the Air Line Pilots Association International on behalf of Jazz’s pilots, and satisfaction of the conditions contained in the Toronto Stock Exchange’s conditional listing approval relating to Air Canada’s investment in Chorus) and there are no assurances that they will be completed as described in this presentation or at all, or that they will deliver any projected benefits. Other factors that could cause results to differ materially from those expressed in this presentation include, without limitation, changes in Air Canada’s financial condition or prospects; adverse developments affecting the airline industry generally; risks relating to aircraft leasing (such as the financial condition of lessees, availability of aircraft, access to capital, fluctuations in aircraft market values, competition and political risks); litigation or regulatory action; and future changes (if any) to Chorus’ dividend policy. For a further discussion of risks, please refer to Chorus’ Annual Information Form dated February 14, 2018, and Management’s Discussion and Analysis of Results of Operations and Financial Condition dated February 14, 2018 and November 13, 2018. All forward-looking information in this presentation represents Chorus’ expectations as of January 24, 2019 and is subject to change after such date. However, Chorus disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws. 4 Delivering regional aviation to the world

About Chorus Delivering regional aviation to the world 5 Delivering regional aviation to the world

CHORUS AT A GLANCE Consistently profitable ~ $1.4 billion TSX: CHR since becoming publicly Ticker symbol Operating revenue - 2017 traded in 2006 ~ 140 million ~ $286 million Focused on enhancing long- term shareholder value Outstanding shares (1) Adjusted EBITDA - 2017 ~ $1 Billion Current monthly dividend of $0.04 per share (DRIP at 4% Market capitalization (2) discount) (1) Outstanding Chorus shares as of January 14, 2019: 140,210,174 (2) Calculated using closing price of Chorus shares of $7.24 on the TSX on January 14, 2019. 6 Delivering regional aviation to the world

CHORUS BUSINESS SEGMENTS Regional Aviation Services Regional Aircraft Leasing 7 Delivering regional aviation to the world

CHORUS BUSINESS SEGMENTS REGIONAL AVIATION SERVICES Regional Aircraft Leasing Airline Operations Aircraft Leasing Under the CPA Operations conducted through Jazz and  Jazz currently earns leasing revenue  Chorus Aviation Capital (CAC) is a Voyageur subsidiaries: under the CPA: regional aircraft lessor with a  Jazz operates scheduled service through a committed fleet of 34 aircraft 1:  34 x Q400s CPA with Air Canada, under the Air Canada  5 x CRJ 900s Express Brand.  11 x ATR 72s  8 x Dash 8-300s  11 x Q400s  5 x PW150 engines  Jazz operates charter flights for a variety  4 x CRJ100s of customers.  2 x CRJ900s  $92.3 million in aircraft leasing revenue  Voyageur Airways provides specialized  4 x E190s under the CPA in Q3 2018. contract flying globally.  2 x E195s  Voyageur Aerotech, Voyageur Avparts and  Eleven additional Dash 8-300s to Jazz Technical Services carry out  CAC’s committed portfolio spans 12 undergo an extended service program Maintenance, Repair and Overhaul customers in 12 countries on 6 (“MRO”) and spare part services. and earn leasing revenue under the continents. CPA. Eight ESPs to be completed by the  This segment includes corporate expenses end of 2019 and the remainder by no such as: interest on Convertible Units, 1 Includes aircraft which have not yet been delivered but for executive and share-based compensation later than December 31, 2022. costs, and professional fees. which lease agreements have been signed. See cautionary statement regarding forward-looking information on slide 4. 8 Delivering regional aviation to the world

Regional Aviation Services Contracted Flying CPA Leasing MRO ▪ ▪ ▪ Jazz is Air Canada’s primary regional Jazz Technical Services provides traditional Chorus owns the majority of the aircraft supplier, ~ 70% of total regional heavy maintenance activities on operated by Jazz under the CPA – unique in capacity Bombardier and Embraer 135/145 aircraft; the Canadian regional industry 24/7 operation enables quick turn times ▪ Voyageur provides specialized, ▪ Voyageur conducts specialty MRO services contracted flying services to blue and is Transport Canada, FAA and chip customers, operating logistical, European Aviation Safety Agency medical and humanitarian type approved missions ▪ Aircraft part out and part sales capabilities through Voyageur Avparts Delivering regional aviation to the world 9 Delivering regional aviation to the world

2019 CPA amendments* Stability, predictability and strong economics * See Notice to Reader on slide 3. Delivering regional aviation to the world 10 Delivering regional aviation to the world

HIGHLIGHTS OF 2019 CPA AMENDMENTS Seizing a unique opportunity to strengthen Chorus ▪ 10-year term extension to December 31, 2035 ▪ ~$2.5 billion in contracted revenue over 17-year term • $1.6 billion from aircraft leasing • $858 million from fixed fees ▪ $97.26 million equity investment in Chorus by Air Canada • 9.99% initial ownership in Chorus • 60-month investment hold • DRIP enrollment and standstill • Right to nominate one director to Chorus Board ▪ Modernization of CPA fleet and increased leasing under the CPA ▪ Reduced margin risk for Jazz • Limited exposure on controllable cost of $2 million annually ▪ Growth of aircraft leasing business outside the CPA See cautionary statement regarding forward-looking information on slide 4. 11 Delivering regional aviation to the world