C100 At Paris Airshow

[boestar]

Chorus Leasing also owns the Q400 aircraft and leases them to Jazz.

[rudder]

Jazz now has an aircraft leasing division(ostensibly to lease out the Dash8-100s as they are removed from the fleet) But is there anything stopping them from placing an order for the C series and leasing the airframes to AC starting in 2020, with an eye to maybe getting scope relief in 2025 so they can operate them in house?

I think that you mean CHR (Chorus Aviation Inc) the same company that recently acquired Voyageur. Jazz Aviation Inc (Jazz) is a wholly owned subsidiary of CHR and the holder of one of the two AOC's.

I highly doubt that CHR is interested in any standalone airline operation (own code) within Canada either now or in the future. Canada functions with a de facto duopoly with some other players that stay within the confines of their niche. Not much room for new entrants that could reasonably expect to be profitable.

There is nothing stopping CHR from expanding its leasing operation to include larger factory new airliners. However, financing a purchase such as that would require significant cash upfront for downpayment as well as solid long term financing. Currently, CHR distributes the majority of free cash in the form of a dividend and maintains just enough cash to finance its fleet acquisitions in order to meet its obligations under the AC CPA (as described above by Boestar).

It is highly unlikely that CHR will be a C series customer.

[Guest]

Of course we should not forget that Jazz Aviation Inc. does own a fair number of aircraft.

http://wwwapps.tc.gc.ca/saf-sec-sur/2/ccarcs-riacc/RchSimpRes.aspx?cn=%7c%7c&mn=%7c%7c&sn=%7c%7c&on=%7cJAZZ%7c&m=%7c%7c

[neverminds]

Yes I meant to say CHR.But I am not suggesting that CHR acquire C series to do "own risk " flying. Rather if AC can find a way to get rid of the remaining E190s starting in 2020, CHR could dry lease Cseries airframes to AC from 2020-2025 and then hopefully get scope relief in 2025 to start operating them themselves under the CPA.

[boestar]

Of course we should not forget that Jazz Aviation Inc. does own a fair number of aircraft.

http://wwwapps.tc.gc.ca/saf-sec-sur/2/ccarcs-riacc/RchSimpRes.aspx?cn=%7c%7c&mn=%7c%7c&sn=%7c%7c&on=%7cJAZZ%7c&m=%7c%7c

Many (most) of those are not "Owned" by Jazz. They are leased by Jazz. In Fact some of those aircraft are no longer in the fleet and have been returned to the Lessors.

in fact the 705 fleet is owned by AC, the Q400 are owned by Chorus, Some of the Dash8-11 are owned by Jazz and some by AC. Much of the CRJ 100 fleet was owned by AC and the remainder GECAS.

So the civil Aircraft register is confusing "Owner" with "Operator"

[Guest]

So then Chorus could start up a airline using the Q400s and lease / purchase the Cseries aircraft. But then of course why would they unless they too have been bitten by the "bigger is better" bug (like WestJet has) rather than to continue to be profitable in their existing world/role. Their stock continues to do well

Five Day

Chorus Aviation Inc up $0.01

Chorus Aviation Inc is up today by $0.01 or 0.17% to $5.77. Over the last five days, shares have gained 1.05% and 26.81% year to date. Shares have outperformed the S&P TSX by 38.34% during the last year.

Chorus Aviation Inc (TSE:CHR. Given Consensus Recommendation of “Buy” by Brokerages

December 16th, 2015 - By Maddie Sorensen - 0 comments

Filed Under: Markets - Consensus Rating Articles

Shares of Chorus Aviation Inc (TSE:CHR. have been given a consensus recommendation of “Buy” by the seven analysts that are covering the company, MarketBeat reports. Three investment analysts have rated the stock with a hold recommendation and three have given a buy recommendation to the company. The average 12 month price objective among brokerages that have covered the stock in the last year is C$6.58.

Several brokerages have commented on CHR.B. TD Securities raised their target price on shares of Chorus Aviation from C$6.50 to C$7.00 and gave the stock a “buy” rating in a report on Monday, November 30th. CIBC upgraded shares of Chorus Aviation from a “sector perform” rating to an “outperform” rating and lifted their price objective for the company from C$6.75 to C$7.00 in a report on Monday, November 16th.

[rudder]

Yes I meant to say CHR.But I am not suggesting that CHR acquire C series to do "own risk " flying. Rather if AC can find a way to get rid of the remaining E190s starting in 2020, CHR could dry lease Cseries airframes to AC from 2020-2025 and then hopefully get scope relief in 2025 to start operating them themselves under the CPA.

Scope relief on 100+ seat jets? Unlikely.

CHR has shown no interest to date in being involved in owning/leasing out aircraft that that are not part of the Dash 8/CRJ product lines that form the Jazz/Voyageur operating fleets. It is unlikely that will change unless CHR has plans to operate EMB's for AC (also unlikely as that particular is currently filled by Skyregional using E175's that are controlled by AC).

Now were CHR to acquire Skyregional that might change and perhaps CHR would be willing to acquire new E jets (E2 version) from Embraer to lease to its own operating subsidiaries.

[Guest]

I think that you mean CHR (Chorus Aviation Inc) the same company that recently acquired Voyageur. Jazz Aviation Inc (Jazz) is a wholly owned subsidiary of CHR and the holder of one of the two AOC's.

I highly doubt that CHR is interested in any standalone airline operation (own code) within Canada either now or in the future. Canada functions with a de facto duopoly with some other players that stay within the confines of their niche. Not much room for new entrants that could reasonably expect to be profitable.

There is nothing stopping CHR from expanding its leasing operation to include larger factory new airliners. However, financing a purchase such as that would require significant cash upfront for downpayment as well as solid long term financing. Currently, CHR distributes the majority of free cash in the form of a dividend and maintains just enough cash to finance its fleet acquisitions in order to meet its obligations under the AC CPA (as described above by Boestar).

It is highly unlikely that CHR will be a C series customer.

Talking about Voyageur here is their current Job Ad.

Pilot - 705 Operations (CRJ, DHC-7, DHC-8)

Location: Multiple Overseas Locations

Employee Status: Full Time / Rotation

Job Description: We are currently accepting applications from qualified individuals for our overseas fleet.

• Our current bases are located throughout Africa and Afghanistan.
• Accommodations are provided by Voyageur. Base amenities include kitchen, laundry, television and internet.
• Voyageur offers competitive salaries and a comprehensive benefits package described on our Careers page;
• Typical rotation pattern for overseas operations are: 8 weeks in / 8 weeks out.

Qualifications:

• Must possess a valid ATPL, valid passport and be able to travel abroad unrestricted;
• Candidates must also be eligible to work for a Canadian company;
• 1000 hours total time;
• 500 hours multi-command time;
• Preference will be given to individuals with time on type

[Boney]

Bigger is better bug????

Instead, consider diversifying. It's a fact that AC long haul side is doing quite well, especially in these times, which offsets the low yields of the domestic markets.

Learn from others, be it success or failure, and apply lessons learnt to, add to or avoid, one's operation.

IMHO.

[Guest]

Bigger is better bug????

Instead, consider diversifying. It's a fact that AC long haul side is doing quite well, especially in these times, which offsets the low yields of the domestic markets.

Learn from others, be it success or failure, and apply lessons learnt to, add to or avoid, one's operation.

IMHO.

Wardair, PWA etc and there are many more who thought bigger was going to be better.

[Boney]

Their 767 is a trial. If it doesn't work out, it ends, if it does, then hopefully they may avoid what wardair, PWA etc went through.

Cheers

[dagger]

I haven't followed Mitsubishi's development of the MRJ that closely, except to note orders, but that program appears to be in significant trouble with the latest delay of EIS of 2018. That could help BBD. While the Japanese carriers will likely hang tough with the MRJ, I wonder if the US orders will shift elsewhere.

[rudder]

Biggest fear of the potential North American customers (AC/JB/UA) is that they will find out that much like the Embraer - the C series is not a Boeing and it is not an Airbus. Nobody wants to get caught with a first generation experimental aircraft. There is no data on reliability or what happens when placed in a high daily utilization airline environment.

AC and JB are more logical customers since what they are looking for is replacement aircraft vs growth aircraft. That means if there are problems then they can extend the use of current fleet (E190/195). This is not unlike what AC did with the 767's in regards to the 787 delivery delays.

It will be interesting to see how this all plays out now that BBD is saying the right things. A large number of first generation Embraers could potentially be headed for the desert.

[Guest]

Their 767 is a trial. If it doesn't work out, it ends, if it does, then hopefully they may avoid what wardair, PWA etc went through.

Cheers

They now have 2 and soon to be increased to 4. Expensive trial unless they can switch them on into some $$$$ making routes.

[dagger]

Biggest fear of the potential North American customers (AC/JB/UA) is that they will find out that much like the Embraer - the C series is not a Boeing and it is not an Airbus. Nobody wants to get caught with a first generation experimental aircraft. There is no data on reliability or what happens when placed in a high daily utilization airline environment.

AC and JB are more logical customers since what they are looking for is replacement aircraft vs growth aircraft. That means if there are problems then they can extend the use of current fleet (E190/195). This is not unlike what AC did with the 767's in regards to the 787 delivery delays.

It will be interesting to see how this all plays out now that BBD is saying the right things. A large number of first generation Embraers could potentially be headed for the desert.

If I were BBD, I'd offer AC's Embraers to US carriers that signed up for the MRJ Give them the AC E-190s for next to nothing, and let airlines like Eastern the Sequel fly them so long as fuel prices are low.

[Super 80]

Bombardier and Airbus don't have Boeing's enthusiasm for horse-trading other OEM's aircraft.

[rudder]

Bombardier and Airbus don't have Boeing's enthusiasm for horse-trading other OEM's aircraft.

And now you know how Boeing secured what was to be a slam dunk NEO order from AC. But they left the door cracked open for BBD when they agreed to take only 20 190's to start. Perhaps Boeing will take the remainder in order to stimulate AC to convert the MAX options, or perhaps BBD will in fact act aggressively to stimulate a C series order from AC. AC will have to decide if it wants to remain in the 100 seat market for the long term. Regardless, AC will eventually need MAX8 and 9 aircraft to replace the Rouge NB fleet. AC will probably be asking both manufacturers to submit offers that include making the 25 190's disappear. As you suggested - Airbus does not seem interested in re-marketing OEM aircraft.

[Super 80]

Delta has already told Air Canada they will take the balance of the E190 fleet with or without Boeing brokering a deal. They want the A330 fleet too (because already having A330s with GE and PW engines just isn't enough)

[CD]

Someone in Delta Tech Ops once told me that "At Delta, we've never met a used airplane we didn't like."

[Super 80]

I can assure you, Delta Tech Ops has definitely met a few used airplanes they didn't like. Richard Anderson on the other hand, he is probably going to spend Christmas war-gaming bringing the L1011 back until the rest of their A330 order arrives.

The 777s that they're bottom feeding for at the moment should bring them untold joy.

[dagger]

MRJ delayed another full year, to 2018 EIS. Mitsubishi says it has to strengthen the frame! That suggests added weight, never a good thing if you made performance promises (which it most certainly did).

[boestar]

The Current Jazz fleet is tied to the CPA which is dictated by Air Canada. Every seat on every aircraft is essentially bought and paid for by AC. Jazz cannot do anything else with those aircraft.

Of course bringing in new aircraft is always an option but what would they do with them? Compete with their only customer? That would be suicide.

[neverminds]

You are missing my point. AC by all accounts would like to get rid of all their E190s, But that would leave them with no aircraft between 75 seats(Jazz and SKR) and 130 seats(737). The C100 would be a great replacement aircraft. So Chorus aircraft leasing division could acquire some C100 and dry lease them to AC until 2025. If they get scope relief in 2025 then great, they could start using them for CPA flying with their own crew and if not, then they could just continue to dry lease them to AC.

This is a long way off and maybe not on AC or Chorus

radar, but if AC does not want any more aircraft on its books after the massive Boeing order, and Chorus is flush with cash, and Bombardier are offering discounts then why is this not an option for Chorus?

[GDR]

It seems to me that with interest rates as low as they are AC can easily come up with the cash, and also with the dollar so low it is one aircraft that they could purchase with Canuck bucks, rather than US$. However, I doubt it is as simple as that.

[Guest]

It will be interesting to see what the numbers are in the United agreement as they would likely influence the rate for any Canadian Carrier who would want to operate the CS series.

The two-year extension to 31 January 2019 includes pay rates for the Bombardier CS100 and CS300 and the Embraer 190 and 195.