Amended and Extended Capacity Purchase Agreement Between Air Canada and Chorus Aviation Finalized

Air Canada and Chorus Aviation, the parent company of Jazz Aviation (Jazz), finalized their Capacity Purchase Agreement (CPA) this week. Air Canada and Chorus Aviation have confirmed that all conditions have been met, and that the amended and extended CPA can proceed as planned. The improved CPA, retroactive as of January 1, was announced on January 14, 2019, and will extend until December 31, 2035. As part of the amended and extended CPA, Air Canada also made a CA $97.26 million equity investment in Chorus. Chorus gave Air Canada 15,561,000 Class B Voting Shares in Chorus capital as part of the CPA, which represents about 9.99% of Chorus’ combined outstanding Class A Variable Voting Shares and Class B Voting Shares. Jazz expects CA $2.5 billion in minimum contracted revenues through the 17-year agreement, of which 65%, or CA $1.6 billion, will be received through aircraft leasing revenue. This supports Chorus’ continued migration of CPA revenue to aircraft leasing. The total incremental contracted revenue from the amended CPA is CA $940 million. This includes CA $630 million in aircraft leasing and CA $310 million in fixed fees. Furthermore, a member of Air Canada’s C-suite, Deputy CEO and CFO Michael Rousseau, will also be appointed to Chorus’ board of directors.