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Sweet second quarter high notes for Chorus

Aug. 5, 2011, Halifax, N.S. - Chorus Aviation Inc. today announced its second quarter 2011 earnings with a net income of $16.9 million or $0.14 per share.


August 5, 2011
By Carey Fredericks

Q2 2011 HIGHLIGHTS

Operating revenue of $402.0 million.
Free Cash Flow1 of $23.9 million.
Net income of $16.9 million.
Net income per share of $0.14.
"The first half of this year was productive as we completed our first season operating Boeing 757s on behalf of Thomas Cook Canada, and began taking deliveries of Q400 NextGen aircraft," said Joseph Randell, President and Chief Executive Officer, Chorus. "We continued to generate positive operating income and cash flows from operations in the second quarter."

Financial Performance – Second Quarter 2011 Compared to Second Quarter 2010

Operating revenue increased from $359.0 million to $402.0 million, representing an increase of $43.0 million or 12.0%.  The increase in operating revenue was primarily due to a $34.6 million or 27.3 % increase in pass-through costs from $126.6 million to $161.1 million, which included $31.5 million related to fuel. Passenger revenue, excluding pass-through costs, increased by $8.4 million or 3.6% primarily due to a 4.3% increase in Billable Block Hours, a 0.4% increase in departures, new revenue earned under the Thomas Cook arrangement, a $0.4 million increase in incentives earned under the Air Canada Capacity Purchase Agreement (CPA); offset by a lower US dollar exchange rate, which also had the translation effect of decreasing mark-up revenue by $0.4 million.

Total operating expenses increased from $333.1 million to $378.1 million, an increase of $45.0 million or 13.5%.  Controllable costs increased by $10.4 million or 5.0%, primarily as a result of new costs associated with capacity growth, including $1.5 million associated with the Q400 aircraft introduction consisting of crew salaries and benefits, and training costs.

Salaries, wages and benefits increased by $13.7 million, due to the increased number of full time equivalent employees required to facilitate capacity growth, wage and scale increases under new collective agreements, increased pension expense resulting from a revised actuarial valuation, and increased incentive compensation expense related to Chorus' employee share ownership purchase plan.

Non-operating expenses amounted to $0.9 million, representing a decrease of $9.7 million.  This change was mainly attributable to a gain on asset backed commercial paper, a foreign exchange gain arising as a result of the change in value of the Canadian dollar relative to the US dollar, and the absence in this quarter of any loss on derivative liabilities.

EBITDA1 was $33.9 million compared to $36.0 million in 2010, a decrease of $2.2 million or 6.0%.  Free Cash Flow was $23.9 million, down $4.8 million or 16.8% from $28.7 million.

Net income of $16.9 million for the three months ended June 30, 2011, a $4.3 million decrease over second quarter 2010.