THE CHRONICLE HERALD
The Halifax-based company that owns Jazz Aviation saw its profits drop in the second quarter of this year as it strapped in and took off with a plan to boost its competitiveness.
Chorus Aviation, the parent company of Jazz Aviation and Voyageur Aviation, inked a deal with Air Canada last year. Under that deal, Chorus agreed to charge Air Canada fixed fees for its aircraft and services, a move which is expected to force the smaller company to reduce its costs.
The deal also opened up about 80 per cent of Air Canada jobs to Jazz pilots to encourage those who are at the top of Chorus’ wage scale to go to Air Canada.
In a move to modernize its fleet, Chorus also agreed to buy 13 Q400 turboprops from Bombardier, with an option to buy 10 more.
The effects of that deal are now rippling through Chorus’ operations. In the second quarter of this year, the company had employee separation program costs of $57.8 million and its non-operating expenses grew by $5.7 million. The company’s net income for the latest quarter was $23.7 million compared to $31.4 million over the same period in 2015.
In the industry, though, Chorus’ moves to reduce labour costs, modernize its fleet and become more price competitive are being hailed as a solid move which will put it on a better footing.
“I am pleased to report solid earnings and operational performance," said Joe Randell, Chorus’ president and chief executive officer. “Chorus’ subsidiaries are performing well and within our expectations.”
Chorus, which trades on the Toronto Stock Exchange under the symbol CHR, has a market capitalization of $750.5 million and closed Thursday at $6.14, near the upper limit of its 52-week trading range.