Tag Archives: Jazz

Jazz Aviation’s 1,380 pilots ratify the new contract

Jazz Aviation LP (Air Canada Express) (Halifax), a wholly owned subsidiary of Chorus Aviation Inc., has announced that its pilots, represented by the Air Line Pilots Association (ALPA) have ratified their tentative agreement reached on January 13, 2015. The term of this agreement is 11 years expiring on December 31, 2025.

ALPA represents approximately 1380 pilots employed at Jazz. The term of the pilot agreement is consistent with the 11 year term of Chorus’ proposed amended capacity purchase agreement with Air Canada (that remains subject to the completion of certain terms and conditions), and therefore provides long-term labor stability. The new collective agreement also provides for productivity enhancements, cost control measures and incentives to grow at competitive rates.

Copyright Photo: TMK Photography/AirlinersGallery.com. Air Canada Express-Jazz Aviation’s Bombardier DHC-8-102 C-FJMG (msn 255) is pictured parked at the gate at Toronto-Pearson International Airport.

Air Canada Express (Jazz) aircraft slide show:

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Air Canada starts Air Canada Express service to Mont-Tremblant, Quebec

Air Canada (Montreal) operated yesterday (December 18) its first nonstop flight between Toronto (Pearson) and Mont-Tremblant, Quebec. Service to Mont-Tremblant will be operated four times per week until March 30, 2015 by Air Canada Express with a 74-seat Bombardier DHC-8-402 (Q400) aircraft.

Air Canada flights from Toronto Pearson to Mont-Tremblant, Quebec are operated on Thursdays, Fridays, Sundays and Mondays. In addition, customers collect Aeroplan Miles through Canada’s leading loyalty program when travelling with Air Canada.

Copyright Photo: TMK Photography/AirlinersGallery.com. Bombardier DHC-8-402 (marketed as the Q400) C-GGOY (msn 4365) sits on the Toronto (Pearson) ramp.

Air Canada Express-Jazz aircraft slide show:

Chorus Aviation reports on its profitable first quarter

Chorus Aviation (Halifax), the parent of Jazz Aviation (Air Canada Express) (Halifax), reported the following for the first quarter:

For the first quarter 2014, Chorus Aviation reported EBITDA of $47.3 million compared to $34.2 million in the same quarter 2013, an increase of $13.1 million. Operating income was $31.2 million, $10.4 million higher than the same period 2013. Adjusted net income of $20.3 million or $0.17 per basic share, was up by $5.6 million or $0.05 per basic share over first quarter 2013. Chorus incurred $2.8 million in voluntary employee severance in the first quarter versus $5.7 million in the same period in 2013. Chorus has invested $12.7 million since the inception of this cost savings program in the first quarter of 2013.

Net income for the first quarter of 2014 was $5.6 million or $0.05 per basic share, a decrease of $3.6 million from $9.2 million. On an adjusted basis, net income was $20.3 million or $0.17 per basic share, an increase of $5.6 million from $14.7 million. A reconciliation of these non-GAAP measures to their nearest GAAP measure is provided in Chorus’ Management’s Discussion and Analysis dated May 14, 2014.

Chorus Aviation is a dividend-paying holding company which owns Jazz Aviation LP and a number of other companies involved in aviation related businesses.

Read the full report: CLICK HERE

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Bombardier DHC-8-311 (Q300) C-GABP (msn 257) of Jazz Aviation (Air Canada Express) touches down at Seattle-Tacoma International Airport (SEA).

Jazz Aviation: AG Slide Show

Jazz Aviation DHC-8-300 lands safely after an engine fire

Jazz Aviation (Air Canada Express) (formerly Air Canada Jazz) (Halifax) Bombardier DHC-8-300 operating a passenger flight from Nanaimo on Vancouver Island to Vancouver experienced an engine fire yesterday (December 12). According to Reuters, “Shortly after the Jazz DHC 8-300 aircraft took off from Nanaimo, on Vancouver Island, the crew was notified of an engine oil issue and flames were seen near one of the engines, Air Canada Jazz said in an emailed statement.

The crew released fire retardant into the engine housing and were able to extinguish the flames. The aircraft, which had 35 passengers and three crew members on board, then returned to Nanaimo, where it was met by emergency vehicles.”

Read the full report: CLICK HERE

Copyright Photo: Ton Jochems/AirlinersGallery.com. Jazz Aviation’s Bombardier DHC-8-301 (Q300) C-GKTA (msn 124)  is seen at the Vancouver hub.

Air Canada Express-Jazz Aviation: AG Slide Show

 

Air Canada to launch daily, year-round flights between Sydney, Nova Scotia and Toronto Pearson on December 18

Air Canada (Montreal) today announced that in response to growing customer demand it will launch daily, year-round service between Sydney, Nova Scotia and Toronto (Pearson) beginning on December 18, 2013 .

Air Canada and TCA has been serving Sydney and Cape Breton for 71 years.

Air Canada’s year-round, daily service between Sydney and Toronto will be operated by Jazz Aviation (Halifax) under the Air Canada Express brand using 50-seat CRJ200 regional jets. It will be the only year-round, nonstop flights operated between Sydney, Nova Scotia and Toronto .

Sydney-Toronto year-round service:

Flight Depart Arrival
AC 8795 Sydney at 05:55 Toronto at 07:33
AC 8794 Toronto at 20:50 Sydney at 00:10

 

Copyright Photo: TMK Photography/AirlinersGallery.com. Jazz Aviation’s Bombardier CRJ200 (CL-600-2B19) C-FZJA (msn 7988) rests between assignments at the Toronto (Pearson) hub.

Air Canada: AG Slide Show

Air Canada Regional-Jazz: AG Slide Show

Chorus Aviation’s 1Q net income drops almost 65% to $9.2 million

Chorus Aviation Inc. (Jazz Aviation) (Air Canada Express) (formerly Air Canada Jazz) (Halifax) has issued its first quarter 2013 earnings, and is revising its quarterly dividend to $0.075 per share from $0.15 per share. The company reported first quarter net income of C$9.2 million ($9 million), down almost 65 percent from the $26.2 million profit in the first quarter a year ago.

First Quarter 2013 Highlights:

  • Operating revenue of $416.3 million.
  • EBITDA1 of $34.2 million.
  • Operating income of $20.8 million.
  • Net income of $9.2 million, or $0.07 per basic share.
  • Adjusted net income1 of $14.7 million, or $0.12 per basic share.
  • Billable Block Hours of 97, 202.

“The first quarter delivered solid results; however, two items negatively impacted the bottom line,” said Joseph Randell, President and Chief Executive Officer, Chorus. “In our continued efforts to improve operational efficiency and to reduce costs, we enacted a voluntary separation program for our more senior pilots and maintenance employees.  The severance cost of $5.7 million will provide a return within the next two years as ongoing operational costs are reduced.  This expense, when factored with the unrealized foreign exchange loss of $5.6 million into the adjusted net income for the quarter, increases earnings per share to the current market consensus of $0.17 per basic share.”

DIVIDEND

Chorus and Air Canada are involved in an ongoing complex arbitration process regarding the 2009 Benchmark.  Chorus remains confident in its position that the Controllable Mark-up of 12.5% in the Capacity Purchase Agreement (‘CPA’) should not change as a result of the arbitration.  Accordingly, no amounts have been recorded in the accounts of Chorus in 2010, 2011, 2012 or 2013 related to the Air Canada claim.  Management has determined that it is not probable that the Air Canada claim will be successful, and it is not practicable to determine an estimate of the possible financial effect, if any, with sufficient reliability.

However, in any litigation process there is always some risk of an adverse outcome. This risk combined with the extended duration of the arbitration has created the risk of a material retroactive amount owing to Air Canada for the period commencing January 1, 2010 should Air Canada succeed in its claim for a material fleet age adjustment in its favour.  The longer this process continues without resolution, the larger the amount of any potential retroactive payment.

In addition, Chorus’ $80.2 million convertible debentures come due in December 2014. Chorus anticipates that an increase in liquidity will provide increased flexibility in addressing the maturity of those debentures, in the context of challenging conditions for the airline industry and global economic uncertainty. Those debentures, issued in November 2009, were used to pay part of the term debt of $115.0 million which was established at the time of the Chorus initial public offering in 2006 and matured in February 2010.  As a result, Chorus believes that strengthening its cash position during this period is prudent.

Chorus will continue to manage its financial leverage ratios, such as its adjusted net debt to equity ratio which has increased as a result of the financing of its new Bombardier DHC-8-402 (Q400) aircraft fleet. Such continued accretive investment in fleet renewal may occur either through refurbishment of the classic Bombardier DHC-8-100 and DHC-8-300 series aircraft or further investment in new generation aircraft.

In consideration of these factors, Chorus has reduced its quarterly dividend from $0.15 per share to $0.075 per share going forward. This will enable Chorus to retain additional cash of $9.3 million per quarter.

While Chorus has current cash available to pay the dividend at the previous rate, the Board of Directors has determined that, given the factors discussed above, it is prudent and advisable to conserve Chorus’ financial resources.

“We have, and continue to prudently manage our financial resources,” continued Mr. Randell.  “The regional airline industry is changing dramatically both here and south of the border. Competition is increasing significantly. We must continue in our efforts to reduce costs, strengthen the fundamentals of our business, and improve our financial position to ensure we have the flexibility required to effectively respond and compete in our ever-changing markets.”

The Board of Directors will continue to assess the dividend payment on an ongoing basis.

Financial Performance -First Quarter 2013 Compared to First Quarter 2012

Operating revenue decreased from $437.1 million to $416.3 million, representing a decrease of $20.8 million or 4.8%.  Passenger revenue, excluding pass-through costs, decreased by $6.4 million or 2.5% primarily as a result of no activity in the quarter for Thomas Cook; offset by rate increases made pursuant to the CPA with Air Canada, an increase in Billable Block Hours of 0.8%, a $0.2 million increase in incentives earned under the CPA, and a higher US dollar exchange rate. Pass-through costs decreased from $176.7 million to $162.0 million; a decrease of $14.7 million or 8.3%, which included a decrease of $1.8 million related to fuel costs. Other revenue increased by $0.2 million.

Operating expenses decreased from $407.4 million to $395.5 million, a decrease of $12.0 million or 2.9%.  Controllable Costs increased by $2.7 million, or 1.2%; offset by a decrease in pass-through costs of $14.7 million.

Salaries, wages and benefits increased by $3.1 million primarily as a result of voluntary employee severance costs related to flight crew and maintenance employees, wage and scale increases under new collective agreements, and increased pension expense resulting from a revised actuarial valuation; offset by a reduction in the number of full time equivalent employees and higher capitalized salaries and wages related to major maintenance overhauls.

Depreciation and amortization expense increased by $0.5 million, primarily related to the purchase of Q400 aircraft, increased capital expenditures on aircraft rotable parts and other equipment, and increased major maintenance overhauls; offset by certain assets having reached full amortization and a change in estimate related to the residual value of the Dash 8-100 and 300 aircraft.

Aircraft maintenance expense decreased by $2.4 million as a result of a $4.6 million reduction related to no activity for Thomas Cook; offset by an increase in engine maintenance activity due to engine charges for the CRJ705 and Dash 8 – 300 aircraft of $1.2 million, increased other maintenance costs of $0.5 million and an increase in the US-dollar exchange rate on certain material purchases of $0.5 million.

Aircraft rent decreased by $5.4 million primarily as a result of no expense in the quarter for Thomas Cook aircraft and the return of CRJ aircraft.

Other expenses increased by $1.3 million primarily due to increased professional fees, increased travel and training costs associated with the Q400 aircraft and increased general overhead expenses.

Non-operating expenses increased by $9.0 million.  This change was mainly attributable to an increase in foreign exchange of $8.8 million (of which $8.9 million was related to an increase in unrealized foreign exchange loss on long-term debt and finance leases) and increased interest expense related to Q400 aircraft financing of $1.0 million; offset by $0.8 million in other income related to a government grant.

EBITDA1 was $34.2 million compared to $42.6 million in 2012, a decrease of $8.4 million or 19.6%, producing an EBITDA margin of 8.2%. Standardized Free Cash Flow was negative $110.9 million, impacted primarily by the continuing growth capital expenditures related to the purchase of Q400 aircraft.

Operating income of $20.8 million was down $8.8 million or 29.7% over first quarter 2012 from $29.6 million.

Net income for the first quarter of 2013 was $9.2 million or $0.07 per basic share, a decrease of $17.0 million or 64.9% from $26.2 million or $0.21 per basic share. On an adjusted basis, net income was $14.7 million or $0.12 per basic share, a decrease of 35.4% or $0.06 per basic share from $22.8 million or $0.18 per basic share.

1Non-GAAP Financial Measures

EBITDA

EBITDA (earnings before interest, taxes, depreciation, amortization and obsolescence) is a non-GAAP financial measure commonly used throughout all industries to view operating results before interest expense, interest income, depreciation and amortization, gains and losses on property and equipment and other non-operating income and expenses.  Management believes EBITDA assists investors in comparing Chorus’ performance on a consistent basis without regard to depreciation and amortization, which are non-cash in nature and can vary significantly depending on accounting methods and non-operating factors such as historical cost.  EBITDA should not be used as an exclusive measure of cash flow because it does not account for the impact on working capital growth, capital expenditures, debt repayments and other sources and uses of cash, which are disclosed in the statement of cash flows which form part of the financial statements.

STANDARDIZED FREE CASH FLOW

Standardized Free Cash Flow is defined as cash flows from operating activities, as reported in accordance with GAAP, less total capital expenditures and dividends.

ADJUSTED NET INCOME

Adjusted net income and adjusted earnings per share are calculated by adjusting net income by the amount of any unrealized foreign exchange gains and losses on long-term debt and finance leases.  During the first quarter of 2013, Chorus recorded an $5.6 million loss in unrealized foreign exchange on long-term debt and finance leases.  These adjustments more clearly reflect earnings from an operating perspective.

Copyright Photo: Keith Burton. Bombardier CRJ705 (CL-600-2D15) C-FCJZ (msn 15040) arrives at the Toronto (Pearson) hub.

Jazz Aviation: AG Slide Show

Air Canada Express logo-2

Jazz logo (Jazz)

Jazz’s current route map:

Air Canada Express-Jazz 5:2013 Route Map

Thomas Cook Group sells its North American companies

Thomas Cook Group (London) has announced it has agreed to sell Thomas Cook Canada Inc. and Thomas Cook USA Holdings Inc. to Red Label Vacations Inc. The group issued this statement:

Thomas Cook Group plc announces it has agreed to sell Thomas Cook Canada Inc. and Thomas Cook USA Holdings, Inc., together known as Thomas Cook North America (“TCNA”), to Red Label Vacations Inc. (which trades as Redtag.ca “Red Tag”). The transaction is for cash consideration of $5.3 million Canadian dollars (£3.4 million at current exchange rates).

TCNA operates a tour operator and distribution network in Canada. TCNA also owns ABC Corporate Services Inc. and D-FW Travel Arrangements Inc. in the United States.

Completion of the transaction is subject to a number of conditions, including clearance by the Competition Bureau of Canada, the release of guarantees provided by Thomas Cook Group plc to third parties on behalf of TCNA and the release of guarantees provided by TCNA in support of the Group’s financing arrangements. The transaction is expected to complete by May 31, 2013. Proceeds will be used to reduce the borrowings of the Thomas Cook Group.

Copyright Photo: TMK Photography.  Boeing 757-28A C-GJZB (msn 28203) operated by Jazz Aviation taxies at the Toronto (Pearson) base.

Thomas Cook (Canada): AG Slide Show

World Airline News block logoEditor’s “To The Point” Observation”: At the height of Thomas Cook Canada, Jazz Aviation was operating a fleet of six leased Boeing 757-200s under the Thomas Cook Airlines (Canada) brand. On April 13, 2012 Thomas Cook announced it was ending the five-year contract with Jazz and all services ended on April 30, 2012. Since then Thomas Cook has been using other airlines as needed.