Chorus Aviation implements further cost cutting measures, Air Canada Express operations reduced

Chorus Aviation reported (06-Apr-2020) the following cost cutting measures, in light of the coronavirus pandemic:

• Suspending all further dividends following payment of the Mar-2020 dividend, with the dividend reinvestment programme to also be suspended;
• Submitting a letter of offer with Export Development Canada to secure USD100 million revolving credit facility for general corporate purposes, repayable in two years;
• Raising approximately USD30 million to USD50 million in financing, secured by up to four unencumbered aircraft;
• Cutting 70% of president and CEO's salary, with executive team members to also forgo up to 50% of salary and the board of directors to take a 25% reduction in fees.

Chorus' Air Canada Express operations were reduced by approximately 90% for Apr-2020 and May-2020, resulting in significant temporary employee reductions. Chorus is reviewing the Canada Emergency Wage Subsidy programme. Voyageur Airways continues to experience demand for overseas humanitarian efforts, contracted cargo services and air ambulance operations in New Brunswick. Voyageur also continues to service essential aviation customer requirements via its MRO operation. Chorus was notified by Bombardier of a temporary delay in the production of nine CRJ900s, resulting in an expected corresponding delay in anticipated leasing revenue under the CPA for these aircraft. Transactions involving the delivery of three ATR 72-600s and three A220-300s in 2020 are now also expected to be deferred. Additionally, many regional aircraft leasing segment customers have contacted Chorus for temporary rent relief, meaning Chorus' trade receivable balance will now be increased in the near term. The company anticipates it will have sufficient liquidity to fund ongoing operations, planned capital expenditures and principal and interest payments associated with long term borrowings. [more - original PR]