Chorus Aviation Inc. · TSX:CHR
Chorus Aviation — Jazz Air Income Fund — Maxim Group Growth Conference (November 2010)
28 slides from Chorus Aviation's conference presentation, Nov 18, 2010
Slide 1: Jazz Air Income Fund – Maxim Group Growth Conference
Jazz Air Income Fund Jazz Air Income Fund Maxim Group Growth Conference JOE RANDELL – President & CEO Allan Rowe – Chief Financial Officer NATHALIE MEGANN – Director, Corporate Communications and Investor Relations New York City November 18, 2010 February 2010
Slide 2: Disclaimer
Disclaimer CAUTION REGARDING FORWARD-LOOKING INFORMATION Certain information in this presentation, and statements made during this presentation, may contain statements which are forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as “antic
Slide 3: Agenda
Agenda Jazz today Performance highlights A different kind of airline The changing regional airline industry Growth opportunities 3
Slide 4: Jazz is Canada's largest regional airline
Jazz is Canada’s largest regional airline 4
Slide 5: We're on solid ground
We’re on solid ground 800+ Daily departures 790+ Destinations 85 Passengers carried in 2009 8.8 M Employees 5,000 5
Slide 6: Canadian-made Fleet
Canadian-made Fleet • Only Canadian regional airline flying regional jets in Canada • 128 Dash 8 and Canadair Regional Jets • Efficient aircraft • Two types = cost effectiveness • Purchase Agreement with Bombardier for a firm order of 15 Q400 NextGen aircraft with options for 15 more 6
Slide 7: Corporate conversion
Corporate conversion Jazz converting to a corporate form – Chorus Aviation Inc. Federal tax laws on income trusts changing in 2011 Conversion should: • promote efficient capital management • permit financial and operational performance to be more easily valued • attract new investors and provi
Slide 8: Corporate conversion (cont'd)
Corporate conversion (cont’d) Chorus Aviation Inc. – our new holding company Why the name Chorus? • Teamwork, unity, people coming together • Harmony and diversity • Natural extension to the Jazz brand Operations branding – Air Canada Jazz and Jazz – will not change Proposed arrangement in t
Slide 9: Corporate conversion (cont'd)
Corporate conversion (cont’d) Jazz Air Income Fund units to be exchanged on a one-for- one basis for Chorus shares Class B Variable Voting Shares – Qualified Canadians Class A Variable Voting Shares – Non-Canadian residents TSX: CHR.B, CHR.A & CHR.DB Dividend Policy - $0.15 per Chorus shar
Slide 10: Agenda
Agenda Jazz today Performance highlights A different kind of airline The changing regional airline industry Growth opportunities 10
Slide 11: Strong operating results – Q3 2010
Strong operating results – Q3 2010 Controllable Controllable on-time flight completion performance 83.1% 98.9% 11
Slide 12: A leader in operational performance
A leader in operational performance (Arrivals within 15 minutes) 86.0% 84.0% 84.0% 83.0% 78.6% 81.1% 81.2% 79.0% 77.3% 75.0% 72.4% 72.0% Q1-Q4 Q1 Q2 Q3 Q1-Q4 Q1 Q2 Q3 Q1-Q4 Q1 Q2 Q3 2009 2010 2010 2010 2009 2010 2010 2010 2009 2010 2010 2010 12
Slide 13: Third quarter 2010 earnings
Third quarter 2010 earnings Jazz Air Income Fund Period ended September 30, 2010 ($ million) Q3 2010 Operating revenue 379.0 Operating income (before amortization of CPA asset) 26.9 Net income 19.1 Distributable cash 30.6 13
Slide 14: Agenda
Agenda Jazz today Performance highlights A different kind of airline The changing regional airline industry Growth opportunities 14
Slide 15: The CPA defines our relationship
The CPA defines our relationship Responsibilities Purchases capacity Provides crews Determines routes Airframe maintenance Flight schedules Flight operations Ticket prices Some airport operations Marketing 15
Slide 16: Jazz is integral to Air Canada's strategy
Relationship with Air Canada Serve high density Serve Point-to-point markets low density markets – by-pass hubs – off peak Jazz is integral to Air Canada’s strategy 16
Slide 17: The CPA benefits both carriers
The CPA benefits both carriers Flexibility Cost advantages Major competitive advantage Protection from cost volatility Guarantees Long-term agreement 17
Slide 18: Agenda
Agenda Jazz today Performance highlights A different kind of airline The changing regional airline industry Growth opportunities 18
Slide 19: The evolving regional industry
The evolving regional industry Mainline Carrier Mainline Carrier CPA At-risk Regional CPA Charters Flying Carrier Regional Ground & Carrier Airport Handling 19
Slide 20: Diversification
Diversification SkyWest to acquire ExpressJet in continued US regional consolidation sth August, 20:0 It takes a lot to overshadow Republic Airways Holdings, but SkyWest managed to do it announced not only its second quarter profits but its acquisition of ExpressJet Airlit and merger with SkyWest su
Slide 21: Partnership with Thomas Cook Canada
Partnership with Thomas Cook Canada • Fly six B757-200s • Canadian gateways to various sun destinations • Winter season (November through April) • Term ending April 30, 2015 • $100 million additional annual revenues • Service is branded Thomas Cook 21
Slide 22: Partnership with Thomas Cook Canada (cont'd)
Partnership with Thomas Cook Canada (cont’d) • Additional staff • Flight attendants (6 per aircraft) • Maintenance • SOCC • Management and administrative personnel • Contract is compatible with CPA and Air Canada • Strong initiative begins diversification of Jazz Air LP • It’s our time to shine in n
Slide 23: Investment in Pluna
Investment in Pluna • $15 million US investment - 33-1/3% direct interest in LARAH - 25% indirect interest in Pluna S.A. • One seat on Pluna Board of Directors • Uruguayan Government to invest $5 million US and maintain current 25% equity stake • Potential to earn significant returns • Jazz sees val
Slide 24: Investment in Pluna (cont'd)
Investment in Pluna (cont’d) • Common fleet type of CRJ705/900 = opportunities to generate value • Jazz to participate in one of world’s fastest growing air travel markets - IATA projects 12.2% passenger demand growth in Latin America for 2010 • Jazz’s experience will help Pluna identify and realize
Slide 25: Agenda
Agenda Jazz today Performance highlights A different kind of airline The changing regional airline industry Growth opportunities 25
Slide 26: Growth Opportunities
Growth Opportunities New strategic partnerships Leverage Strengths Charter programs CPA 26
Slide 27: Current investment highlights
Current investment highlights • A high yield investment – approximately 10% to 11% currently • Industry-leading financial and operational performance • Debt free – a clean balance sheet with convertibles outstanding • Strong, positive cash flow • $180 million in fair market value of unencumbered fix
Slide 28: Jazz Air Income Fund
Jazz Air Income Fund Jazz Air Income Fund November, 2010 February 2010 28
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