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Jazz carrier Chorus Aviation posts flat Q2 results

Aug. 15, 2014, Halifax - Chorus Aviation Inc. has reported relatively flat adjusted profits for the second quarter, helped by a stronger Canadian dollar and lower airport and terminal fees.


August 15, 2014
By The Canadian Press

Excluding one-time items, the Halifax-based airline, which operates
fights for Air Canada under the Jazz banner, had an adjusted
net income of $22.2 million for the three-month period ended June 30.

 

That amounted to 18 cents per share, slightly higher than
the $21.4 million, or 17 cents per share in the same quarter a year
earlier.

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Net income was $36.5 million, or 30 cents per share, compared with $7.9 million, or six cents per share, year over year.

 

Chorus said the net income had an
unrealized foreign exchange gain of $14.3 million versus an unrealized
foreign exchange loss of $13.5 million in the same period of 2013.

 

Operating revenue climbed nearly two per cent to $417.8 million from $410 million in the same quarter of 2013.

 

"Chorus continues to generate
positive operating income and cash flows from operations and I'm pleased
to report strong earnings and operational performance again this
quarter," president and CEO Joseph Randell said in a statement.

 

In a conference call with analysts following the
release, Randell and chief financial officer Rick Flynn said the
airline was continuing "productive" talks over its capacity purchase
agreement with Air Canada.

 

Their current contract does not expire until
2020.

 

Walter Spracklin, an analyst with RBC Capital
Markets, said the negotiations are one example of the way management is
"executing across their planned initiatives."

 

"CHR did not provide any
colour on potential contract revisions or when these changes could take
place," he wrote in a note. "However, we believe that any amendments
prior to 2020 would remove certain inefficiencies in the existing CPA
contract, which would be mutually beneficial and unlock shareholder
value."

 

Chorus operates Air Canada Express flights under
a capacity purchase agreement with Air Canada as well as a charter
service under the Jazz banner. It has a fleet of 122 aircraft. The
airline was formed in 2001 when Air Canada combined four regional
carriers into one.