Tag Archives: DHC8402

Colgan Air operates its last revenue flight

Colgan Air (2nd) (Memphis) is now in the history file. The airline has operated its last revenue flight. As planned, Colgan Air operated its last flight, flight UA 3923, from Washington (Dulles) to Albany, NY as an United Express carrier on September 5.

United Express-Colgan Air:

Eurolot converts six Bombardier Q400 options to firm orders

Eurolot (eurolot.com) (Warsaw) has converted options on six Bombardier DHC-8-402s, marketed as the Q400 NextGen airliners, to a firm order that will increase its fleet to 14 aircraft.

Eurolot’s firm order for eight airliners with 12 options was announced on March 9, 2012, and delivery of the first aircraft was announced on May 17, 2012.

Including this transaction, Bombardier has booked firm orders for 460 Q400and Q400 NextGen turboprops,and delivered aircraft are in service with more than 40 operators in 33 countries, on six continents. These aircraft have transported more than 227 million passengers and have logged more than 3.5 million flight hours and over 3.8 million take-offs and landings.

Eurolot:

Frameable Prints and Posters:

airBaltic turns itself around, achieves a profit

airBaltic (airBaltic.com) (Riga) has been successful in turning around the fortunes of the company by achieving a profit through its reorganization program. The airline issued the following statement:

“In July 2012, Latvian airline airBaltic reported a profit, as summer travel peaks and airBaltic ReShape restructuring programme gathers pace.

Martin Gauss, Chief Executive Officer of airBaltic: “We are delighted to see that airBaltic ReShape restructuring program brings consistently better net results every month. We are very satisfied to achieve a net profit of LVL 1.4 million.”

In July 2012, airBaltic operated 4,520 flights, or 19% less than in July 2011 when airBaltic operated 5,590 flights.

The airline carried 322,430 passengers in July. During the first seven months of 2012, airBaltic transported a total of 1,732,920 passengers.

The airline’s load factor, which represents the number of passengers as a proportion of the number of available seats, was stable high at a level of 80% in July 2012, compared to the same month a year ago. The airline’s load factor for the first seven months of 2012 was at a level of 73%, unchanged compared to the same period last year.

The 15-minute flight punctuality indicator for airBaltic was at a level of 89.5% in July 2012. This means that 89 of every 100 airBaltic flights in July departed at the planned time or with a delay of no more than 15 minutes.”

	July ’12
Number of flights	4 520
Number of passengers	322 430
Load Factor	80%
	January-July ’12
Number of flights	28 270
Number of passengers	1 732 920
Load factor	73%

Copyright Photo: Stefan Sjogren. Part of the success has been the transition to more fuel efficient aircraft and dropping unprofitable routes. Bombardier DHC-8-402 (Q400) YL-BAE (msn 4289) climbs away from Stockholm (Arlanda) bound for the Riga hub.

airBaltic Slide Show:

Frameable Color Prints and Posters:

Chorus Aviation posts a second quarter net profit of $22.9 million

Chorus Aviation Inc. (Jazz Aviation) (Air Canada Express) (Halifax) has announced its second quarter 2012 earnings, with net income of (all currencies in Canadian dollars) $22.9 million or $0.18 per share, and adjusted net income¹ of $27.4 million or $0.22 per share.

Q2 2012 Highlights:

Operating revenue of $426.3 million.
Free Cash Flow¹ of $38.7 million, or $0.31 per share.
Operating income of $36.6 million.
Net income of $22.9 million, or $0.18 per share.
Adjusted net income¹ of $27.4 million, or $0.22 per share.

The full report:

Financial Performance -Second Quarter 2012 Compared to Second Quarter 2011

Operating revenue increased from $402.0 million to $426.3 million, representing an increase of $24.2 million or 6.0%. Passenger revenue, excluding pass-through costs, increased by $25.7 million or 10.8% primarily as a result of $9.0 million related to the early termination of the Thomas Cook Flight Services Agreement, rate increases made pursuant to the CPA, an adjustment of $1.8 million related to the new rates which were retroactive to January 1, 2012, a higher US dollar exchange rate, and a $1.4 million increase in incentives earned under the CPA with Air Canada; offset by a $1.9 million or 1.2% decrease in pass-through costs from $161.1 million to $159.2 million, which included $5.3 million related to fuel. Other revenue increased by $0.3 million.

Operating expenses increased from $378.1 million to $389.7 million, an increase of $11.6 million or 3.1%. Controllable Costs increased by $13.5 million, or 6.2%; offset by a decrease in pass-through costs of $1.9 million. Controllable operating expenses were impacted by the changes in the fleet ownership structure for the Q400 aircraft. CRJ100 aircraft, previously under operating leases, are being replaced by owned Q400 aircraft, whose ownership costs are comprised of depreciation under operating expenses, and interest under non-operating expenses. The Q400 aircraft lease revenue under the CPA is captured under operating revenue and is designed to provide compensation to Chorus for both depreciation and interest expense. As interest expense is shown below the operating margin, operating income increased by a similar amount on a quarter over quarter basis.

Depreciation and amortization expense increased by $4.0 million, of which $3.0 million is related to the purchase of Q400 aircraft, with the balance due to the increased major maintenance overhauls and increased capital expenditures on aircraft rotable parts and other equipment; offset by certain assets reaching full amortization.

Aircraft maintenance expense increased by $2.3 million as a result of increased Block Hours of $0.4 million, the effect of the increase in the US-dollar exchange rate on certain material purchases of $1.3 million, and increased other maintenance costs of $2.6 million; offset by a decrease in engine maintenance activity due to the return of CRJ aircraft of $2.0 million.

Salaries, wages and benefits increased by $2.8 million as a result of wage and scale increases under new collective agreements, increased Block Hours, and increased pension expense resulting from a revised actuarial valuation; offset by a reduction in the number of full time equivalent employees.

Other expenses increased by $3.4 million primarily due to increased general overhead expenses (crew expenses increased due to increased activity, rates and training expenses) and professional fees.

Non-operating expenses increased $7.8 million. This change was mainly attributable to a foreign exchange loss of $4.8 million (of which $4.5 million was related to an unrealized foreign exchange loss on long-term debt and finance leases) arising as a result of the change in value of the Canadian dollar relative to the US dollar, and increased interest expense related to the Q400 aircraft financing of $2.1 million.

EBITDA¹ was $50.4 million compared to $33.9 million in 2011, an increase of $16.5 million or 48.9%. Free Cash Flow was $38.7 million, an increase of $15.4 million or 66.5% from $23.3 million.

Operating income of $36.6 million for the three months ended June 30, 2012, was up $12.6 million or 52.6% over second quarter 2011 from $24.0 million.

Net income for the second quarter of 2012 was $22.9 million or $0.18 per share, an increase of $6.0 million or 35.3% from $16.9 million or $0.14 per share.

CPA rate setting negotiations

On August 7, 2012, Jazz and Air Canada finalized an agreement on the establishment of new rates for controllable costs that are payable by Air Canada under the CPA in respect of the years 2012 to 2014 inclusive. This rate review and adjustment is required under the terms of the CPA. The new rates are retroactive to January 1, 2012, and the parties have reconciled the amounts previously paid to the amount owing based on the new rates. The reconciliation is conducted so that the parties will be in the same position they would have been had the new rates been in effect as of January 1, 2012.

Update on investment in South American regional carrier Pluna.

On April 30, 2010, Chorus purchased a 33% non-voting interest in Latin American Regional Aviation Holding Corporation (LARAH). LARAH held an indirect 75% equity interest in Pluna Líneas Aéreas Uruguayas S.A. The remaining 25% equity interest in Pluna was held, indirectly, by the Government of Uruguay.

In the second quarter of 2012, it was announced that Pluna was in financial difficulty, and that the Uruguayan government had taken control of the airline, allowing it to continue operating. All of the shares in Pluna held indirectly by LARAH, including the portion indirectly owned by Chorus, were placed in trust with the Montevideo Stock Exchange in return for certain conditions and indemnities from the Uruguayan government. As a result, Chorus recorded a write-down of $16.4 million to the fair value of the investment through other comprehensive loss, as there is no indication that the LARAH shares hold any current value, and there can be no assurances that a successful recapitalization of Pluna will result in Chorus holding an ownership stake in the resulting entity.

Subsequent to June 30, 2012, Pluna announced that it had ceased operations indefinitely. The situation with Pluna has no effect on Jazz operations or current cash flows.

¹ Non-GAAP Financial Measures

Air Canada Express-Jazz:

Island Air launches a new livery and will add ATRs in Hawaii

Island Air (Hawaii) is overhauling their already colorful livery. Following the announcement by Hawaiian Airlines that they will start an inter-island turboprop subsidiary, Island Air has announced a complete image and brand overhaul. The inter-island airline is also adding ATR 42s and ATR 72s starting in August.

The comprehensive rebranding touches every aspect of the airline; from an enhanced website to a newly inspired aircraft livery design, including an exciting new logo mark and identity.

Along with the new look, Island Air is upgrading its fleet with ATR 42 and ATR 72 aircraft. The new aircraft are more fuel efficient, and carry more passengers than the current Bombardier DHC-8-100 aircraft that are being replaced.

The changes and additions to Island Air’s brand will take place incrementally with the complete rebranding targeted for completion in the fall.

Top Image: Island Air.

Click on the map to expand.

Bottom Copyright Photo: TMK Photography. Island Air operated the Bombardier DHC-8-402 (Q400) in the past but the type proved to be too large at that time.

Island Air:

Chorus Aviation Inc. exercises options to acquire additional Bombardier Q400 NextGen aircraft

Chorus Aviation Inc. (Halifax) today announced it has exercised six of 15 options it holds to acquire additional Bombardier DHC-8-402 (Q400) NextGen aircraft to be operated by its subsidiary, Jazz Aviation LP (Halifax) under the Air Canada Express brand.

Jazz will operate 16 Q400s this month under the Air Canada Express brand, which includes one Q400 on short term lease for the peak summer season only. The Q400 aircraft accommodate 74 passengers, and are configured in a single cabin. The six optioned Q400s are contracted to be delivered at a rate of two per month in February, March and April, 2013, and will be placed into operation the subsequent month. A total of nine 50-seat CRJ100 aircraft will be removed from the Jazz fleet between December, 2012 and May, 2013. As a result, the covered fleet under the Capacity Purchase Agreement with Air Canada will be reduced from 125 to 122 aircraft, with the overall seating capacity, operated under the CPA with Air Canada, being held relatively constant.

The new aircraft will be leased via a Chorus leasing company to Jazz. The purchase is supported by a third party lender under terms similar to the original order of 15 Q400 aircraft. The transaction is anticipated to be accretive to Chorus’ consolidated operating results. As required under the purchase agreement, Chorus has made pre-delivery payments of approximately $13 million USD which have been funded from current cash balances and will not impact Chorus’ current dividend policy.

In support of the continued fleet renewal program at Jazz, Air Canada and Jazz have agreed to amend their CPA to reflect the following:

Covered Aircraft reduced from 125 to 122 aircraft, resulting in a net reduction of six seats in the entire Jazz CPA fleet effective May, 2013 once all Q400 aircraft have been introduced into service.
In February 2013 when the number of Covered Aircraft reaches 122 aircraft, the annual minimum guaranteed Block Hours of 339,000 will be reduced to approximately 331,000 Block Hours to reflect the new number of Covered Aircraft.
The agreement between the parties does not change the mark-up on controllable costs structure and mark-up rates but establishes new metrics resulting from the new annual minimum guaranteed Block Hours as follows:
- The Compensating Mark-up will now be applied based on the range between the new annual minimum Targeted Block Hours of approximately 367,000 and the revised annual minimum guaranteed Block Hours of approximately 331,000. The difference between the annual minimum guaranteed Block Hours and the annual minimum Targeted Block Hours remains at 36,000 Block Hours. This agreement also resolves one of the issues raised in the 2009 Benchmark Arbitration with reference to how the Compensating Mark-up formula will be applied.
- Mark-up on variable controllable costs for annual Block Hours over 375,000 will remain at 5.0%.

The exercise of the six options and the amendments to the CPA do not result in any change to Chorus’ current annual Block Hour guidance for the year 2012 of between 385,000 and 400,000 hours.

Air Canada Express-Jazz:

EuroLOT acquires its first three Bombardier Q400s, opens new routes to Amsterdam and Bremen

EuroLOT (eurolot.com) (Warsaw) took delivery of its first three new Bombardier DHC-8-402s (Q400s) in May with the pictured SP-EQA (msn 4406) arriving first on May 18. The carrier opened new routes to Amsterdam from Gdansk (three flights a week) and Krakow (four flights a week) and to Bremen from Gdansk (three flights a week) on June 6.

Copyright Photo: Ton Jochems. The arrival of the Q400s spawned this updated 2012 livery which now features web titles and a reverse red and white tail logo.