Chorus Aviation Overview March 25, 2019 D e l i v e r i n g r e g - - PowerPoint PPT Presentation

TSX: CHR

D e l i v e r i n g r e g i o n a l a v i a t i o n t o t h e w o r l d

March 25, 2019

Chorus Aviation Overview

This presentation contains “forward-looking information” as defined under applicable Canadian securities laws. Forward-looking information is identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and similar terms and phrases, including references to

• assumptions. Such information may involve but is not limited to comments with respect to

strategies, expectations, planned operations or future actions. Forward-looking information relates to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and other uncertain

• events. Forward-looking information, by its nature, is based on assumptions and is subject to

important risks and uncertainties. Any forecasts or forward-looking predictions or statements cannot be relied upon due to, among other things, external events, changing market conditions and general uncertainties of the business. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from those expressed in forward-looking information. Factors that could cause results to differ materially from those expressed in this presentation include those identified in Chorus’ public disclosure record available at www.sedar.com and the risk factors identified in Chorus’ Annual Information Form dated February 21, 2019. Statements containing forward-looking information in this presentation represent Chorus' expectations as of the date of this presentation (or as of the date they are otherwise stated to be made) and are subject to change after such date. Chorus disclaims any intention or

• bligation to update or revise such statements to reflect new information, subsequent events
• r otherwise, unless required by applicable securities laws.

Caution regarding forward-looking information

Chorus Aviation Overview

2

3

Ch Chorus s is a f s a fas ast-grow

• wing

gl globa

• bal provid

ider r of in integrated regio ional a l avia iatio ion s solu lutions

Chorus Aviation Overview

Regional aviation is based on aircraft carrying Up t p to 130 pa 0 passenge gers

Regional Jets Up to 130 passengers

Bombar bardi dier

CRJ-200 to CRJ-1000

Embr brae aer

E135 to E190

Airbus bus

A220

83 83% 37% 7% 17% 7% Turbo props Regional Jets Narrow Body Jets

2 main types of regional aircraft Flying shorter distances than Narrow Body jets

4

Chorus Aviation Overview

3,60 ,600 2,300 00 5,90 ,900 15 15,80 800 4,500 00 Regional Aircraft Narrow Body Wide Body

Accounting for ~22% of the world’s commercial fleet

Regional aircraft are fundamental to efficient air transport networks and link 60% of the world’s communities 1

Jet ets TP TP

1 OAG (20

2012) 2). 2 FlightGlobal (2019), includes in-service aircraft with more than 20 seats

50% 50% of

• f wor
• rld

passe ssengers s fly <500 m 500 miles

Turbo props Up to 90 passengers

Bombar bardi dier

Dash 8 – 100 to 400

ATR TR

ATR 42 to ATR 72

% of all flights below 500 miles 1 Worldwide aircraft fleet 2

Regional aviation shows strong stability through economic cycles

Chorus Aviation Overview

5

Regional aviation is a defensive sector in economic downturn

Indexed aircraft value volatility for narrow-body, turboprop and regional jet aircraft

80 85 90 95 100 105 110 115 120 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

• Mainline operators look to contract out more flying to regional partners
• Smaller aircraft are best suited to serve reduced market demand

Turboprop aircraft Narrow-body aircraft Regional jet aircraft

Source: AVITAS

1 2 3

Cho horus rus ha has a uniqu que s e str trategy egy to p provid ide a a f full ull suit uite

• f regio

iona nal l avia iatio ion s n serv rvic ices to c cus ustomers rs world rldwid ide Cho horus rus is is we well-posit itio ione ned for s r sig ignif nific icant nt gr growth th o

• ppo

pportu tuniti ties es, as an int n interna rnatio iona nal l air ircraft le lessor r and nd le leasing ing opport rtunit unitie ies wit ithin it hin its CPA w wit ith h Air C ir Cana nada Ch Chorus has a pr predi edicta ctabl ble r e reven enue e str trea eam, wit ith 9 h 90%+ o

• f annua

nnual l revenue nues secur ured thr hroug ugh lo h long ng-te term contr tracts cts a and d str trong g rel elati tionships ps

6

Investment Highlights

Chorus Aviation Overview

Appendix 2

Supplemental information

6

Appendix 1

Financial Statements

5

Conclusion

4

Regional Aircraft Leasing

3

Regional Aviation Services

2

Chorus Overview

Contents

Chorus Aviation Overview

7

1

• Chorus has become a significant player

in global regional aviation

• $1.45B revenues in 2018
• $343M adjusted EBITDA 1 in 2018
• 5,200 employees worldwide
• $1.1B market capitalization as of March 15
• Led by a very experienced and stable

management team

• 3 complementary lines of business generate

value at every stage of an aircraft’s lifecycle

• 12%+ ROIC in the last 2 fiscal years, including

fast-growing aircraft leasing division

8

Chorus Aviation Overview

Chorus Overview - Highlights

1 Adjusted EBITDA is a non-GAAP financial measure

Consistently profitable since 2006 IPO

87

Aircraft Leased:

40 outside N-A 47 inside CPA

$0.04

Monthly dividend per share (DRIP)

5,200

Employees

TSX:CHR

Trading symbol

Chorus has become a sig signific ifican ant p pla layer in global regional aviation

Chorus Aviation Overview

9

~$1.13B market capitalization as of March 15, 2019 1

135

Aircraft owned

$343M

2018 Adjusted EBITDA

$1.45B

2018 Revenues

Note: Market capitalization value based on 156,147,655 shares outstanding and TSX closing stock price of $7.30 as of March 15, 2019.

40 ye year ars

Jose seph R h Rand ndell

Pres esiden ent an and Chief ef E Exec ecutive e Officer er

30 ye year ars

Co Colin Co Copp

COO an and P Pres esiden ent, Chor

• rus A

Aviat ation

• n S

Ser ervices es

37 ye year ars

Stev eve R e Ridolfi fi

Pres esiden ent, Chor

• rus A

Aviat ation

• n C

Cap apital al

26 ye year ars

Jolen ene M e Mahody

Exec ecutive e VP an and Chie ief Fin inancia ial O l Offic icer

5 ye year ars

Denni nnis L s Lopes

Sen enior

• r V

VP, C Chief ef Leg Legal al Officer er an and C Cor

• rp. S

Sec ecret etar ary

A hi highl hly e experi erienc enced ed and sta tabl ble management team with significant aviation experience

Chorus Aviation Overview

10 Gary ary O Osborn rne

Inco coming g Chie ief Fin inancia ial O l Offic icer

27 ye year ars

Delivering revenue a enue and nd net net ea earni rning ngs g growth

11

Chorus Aviation Overview

Operating Revenues Adjusted EBITDA

Significant growth potential remains, both inside and outside the CPA

Adjusted Net Income

107. 7.2 115 115.4 102.0 .0 115 115.4 12 121. 1.8

2014 2015 2016 2017 2018 $M

▲6.4% 4%

CAG AGR

2014 t to 2 2018 18

215. 5.9 228 228.3 248.1 .1 286.9 86.9 342.7 .7

2014 2015 2016 2017 2018 $M

1,666 ,666 1,54 545 1,27 277 1,352 52 1,451 51

2014* 2015 2016 2017 2018 $M

▲13 13.8%

CAG AGR

2014 t to 2 2018 18

▲6. 6.6% 6%

CAG AGR

2016 t to 2 2018

12%+ %+ RO ROIC

Effective 2019, the CPA fixed fee compensation reduces from $111.3M (2018) to $75.5 for 2019 and 2020. See slide 22.

Chorus activities are carried out through 2 business segments: Regional Aviation Services and Regional Aircraft Leasing

Chorus Aviation Overview

12

Regional Aircraft Leasing and CPA leasing account for 54% of

Adjusted EBITDA and hold strong growth potential

Scheduled Flights Charter Specialized contract flying MRO Heavy mods and part-out Spare parts provisioning

Regional Aircraft Leasing

40 40 40 40 ~ 20%

FY 2018 Adjusted EBITDA Aircraft leasing under CPA

75 75 47 47 ~ 34%

FY 2018 Adjusted EBITDA Jazz

 

Jazz Technical Services



Voyageur Airways

20 20

 

Voyageur Aerotech

 

Voyageur Avparts



Total 135 87

Lines of business Aircraft Fleet

• wned

Regional Aviation Services Jazz Aviation LP Voyageur Aviation Corp. Chorus Aviation Capital Corp.

~ 46%

FY 2018 Adjusted EBITDA Legal Entity Division Aircraft Leasing Contracted Flying Maintenance

Chorus operates 13 13 f fac acilit ilitie ies ac s across s Can anad ada a plus 3 international offices for its leasing business

13

Chorus Aviation Overview



Headquarters (2)

• Admin offices / crew bases (8)

▲ Line maintenance facilities (4)  Heavy maintenance facilities (2)

Vancouver Toronto Montreal Calgary North Bay 



• ▲
• ▲
• ▲
• ▲
• Singapore

Cho horus us Aviat ation

• n

Cap apital al In Internat ation

• nal

al

• ffic

ffices

Halifax



• 

Ireland

• England

Note: Chorus’ presence in Singapore and England consists of business development representatives

Grow our regional aircraft leasing business through aircraft acquisitions, portfolio acquisitions and potential skyline transactions Grow our regional aviation services of contracted flying, MRO and technical services Leverage the synergies and expertise across our lines of business to further drive diversification and profit

14

Chorus Aviation Overview

Our strategic agenda

Con

• ntract

cted Fly lyin ing Main intena nance, , Repa pair ir & & Ov Overha haul Aircra raft Leasi sing & & Trading ding

Profit gr t growth th s syn ynergi gies across our 3 lines of business

Chorus Aviation Overview

15

Chorus generates value at every stage of an aircraft’s lifecycle

MRO Services New Customers

Appendix 2

Supplemental information

6

Appendix 1

Financial Statements

5

Conclusion

4

Regional Aircraft Leasing

3

Regional Aviation Services

2

Chorus Overview

Contents

Chorus Aviation Overview

16

1

• Largest historical business segment currently

generating ~80% of company adjusted EBITDA

• Includes aircraft leasing under the CPA,

contract flying operations and range of MRO, engineering and technical services.

• Capacity Purchase Agreement (CPA)

between Jazz and Air Canada extended to 2035

• Minimum $2.5B in revenues over 17 years
• Provides opportunities to lease new larger

aircraft and modernize older ones

• Growth opportunities for MRO activities

17

Chorus Aviation Overview

Regional Aviation Services - Highlights

See cautionary statement regarding forward-looking information on slide 2

Contracted flying generates greatest revenue stream

Operates scheduled service through a CPA with Air Canada under the Air Canada Express brand Offers charters throughout North America for corporate clients, governments, special interest groups and individuals

18

Chorus Aviation Overview

Provides medical, logistical and humanitarian flight operations to blue chip customers globally

Air Canada Express flying Charter flights Specialized contracted flying

Chorus is Air Canada’s pri rimary ry r reg egiona nal part rtner ner

Responsibilities under the Capacity Purchase Agreement Air Canada Jazz

• Purchases capacity
• Manages routes
• Sets flight

schedules

• Sets ticket prices
• Conducts marketing
• Assumes

commercial risk

• Retains revenues for

passenger & cargo transport

• Supply of flying crews
• Airframe maintenance
• Flight operations
• Some airport operations
• General administration

19

Chorus Aviation Overview

• Fl

Flexibility to r

• respond
• nd qui

uickly and nd e efficient ntly t to m

• market cha

hang nges and nd op

• ppor
• rtuni

unities

• Jaz

azz man anag ages Air C Can anad ada a Express operat ations at at 3 36 ai airports ac across Can anad ada

• Sour
• urce of
• f qua

ualified p pilot

• ts t

thr hroug

• ugh

h Pilot

• t M

Mob

• bility P

Prog

• gram

Benefits for Air Canada

~74%

• f Air Canada’s

regional seat capacity

116 Aircraft operated

by Jazz

47 Leased under

the CPA

~700

daily flights

79

N.A. destinations

Largest Chorus customer

• $97.26M equity investment by Air Canada

in Chorus

• 9.99% initial ownership
• 60-month investment hold
• DRIP enrollment and standstill
• One seat on Chorus Board
• 60% of investment proceeds to purchase

nine new CRJ900s for Air Canada Express fleet will increase leasing revenue under the CPA

• 40% of investment proceeds to acquire

aircraft for the leasing business

20

Chorus Aviation Overview

Cho Chorus rus and nd A Air r Ca Cana nada a are e true a rue allies es

• Guarantees ~$2.5B in contracted

revenue over 17 years

• $1.6B from aircraft leasing
• $858M from fixed fees
• Plan to modernize Air Canada

Express fleet with increased leasing

• f larger aircraft
• Margin risk on controllable costs

reduced to a maximum of $2M per year

Ame Amende ded/ d/extende ded C d CPA with Air Canada to 2035

Chorus Aviation Overview

21

Secures highly predictable revenues and earnings for the next 17 years

See cautionary statement regarding forward-looking information on slide 2

253 266 593 748 134 577 980 1,610 223 151 325 308 399 548 858

Original CPA Amended CPA Original CPA Amended CPA Original CPA Amended CPA Original CPA Amended CPA

Fixed fee Aircraft leasing

476 417 918 1,056 1341 976 1,528 2,468

CPA extension increases total minimum contracted revenue by ~$940M

• Near-term fixed fee

reductions more than offset by term extension and aircraft leasing

• Aircraft leasing driving ~65%
• f the contracted revenue for

the term of the amended agreement

• Potential for additional lease

extensions/renewals beyond 2025

• Maximum available

performance incentives will average ~$3.4M annually over the term

• These are variable in nature

and are not included in the contracted revenue figures

22

Chorus Aviation Overview

1 Certain current aircraft leases under the current CPA extend past December 31, 2025 2 ‘Total Amended CPA’ column includes contracted aircraft leasing for 2036 and beyond estimated at $19 million

See cautionary statement regarding forward-looking information on slide 2

2019-2020

Significant fleet transition

2021-2025

• Min. 105 aircraft

2026-2035

• Min. 80 aircraft

TOTAL

($59M) +$138M +$842M +$940M

Minimum contracted revenue in CPA ($M)

2

Change vs Original CPA

Aircr craft ty t type pe

Seat at Cap ap. Exis xistin ing Fleet eet

Comme mment nt

Am Amend nded CP CPA

Bombardier Q400 NextGen 74 44

• 3 will be removed in 2023
• 12 currently leased under the CPA will

extend lease to 2030

• 19 leases expiring between the end of

2025 and 2028 36

Bombardier CRJ-900 75 21

• 9 CRJ900s will be purchased and leased

under the CPA

• 5 CRJ900s will be sourced by Air Canada

and leased to Jazz in the first half of 2019 35

Bombardier CRJ-200 50 10

• Transferred to Jazz from Air Georgian
• 15 to operate until 2025

15

Bombardier Dash 8-300 50 26

• 19 aircraft will undergo an Extended

Service Program and generate leasing revenue under the CPA

• 8 of the 19 completed to date

19

Bombardier Dash 8-100 37 15

• Removed from the fleet and replaced

with larger aircraft

The amended CPA brings significant modernization to the Air Canada Express fleet

23

Chorus Aviation Overview

• Fleet known by aircraft type until 2025
• Post-2025: Commitment to operate a minimum of 80 aircraft in the 75 to 78 seat range
• Current lease commitments beyond 2025 leave substantial room for additional lease extensions /

renewal on current aircraft and possibility of new aircraft

Maintenance Repair & Overhaul (MRO) and Parts

• 6-bay, 80 000 sq. ft. facility
• 24/7 operations provide flexibility to serve carriers exactly

when needed

• Certified to perform traditional heavy maintenance activities
• n Bombardier and Embraer 135/145 regional aircraft
• 200 000 sq. ft. facility
• Performs heavy MRO activities, customized designs and

engineering and aircraft modifications

• Transport Canada, FAA and European Aviation Safety Agency

approved

• Transport Canada certified Canadian Design Approval

Organization

• Supplemental Type Certificates for Dash 8 100/200/300/

Q400s and Dash 7s

• Provides parts provisioning, sales and service for regional

aircraft - great complement to MRO activities

24

Chorus Aviation Overview

Halifax, NS North Bay, ON

Appendix 2

Supplemental information

6

Appendix 1

Financial Statements

5

Conclusion

4

Regional Aircraft Leasing

3

Regional Aviation Services

2

Chorus Overview

Contents

Chorus Aviation Overview

25

1

• Rapidly growing business launched in 2017
• Attractive business with many synergies

with Contracted Flying and MRO

• Led by industry veterans with strong

relationships throughout the industry, including over 100 airlines

• Key achievements in 2 years:
• C$401M1 capital raised to date
• Committed fleet of 40 aircraft worth US$ 860M
• US$300M warehouse facility
• Already the world’s 4th largest regional aircraft

lessor based on portfolio value

26

Chorus Aviation Overview

Regional Aircraft Leasing - Highlights

1 $97.26M of the $401M relates to Air Canada’s equity investment; 40% will be used to acquire third-party

leases and 60% to acquire aircraft to operate under the CPA See cautionary statement regarding forward-looking information on slide 2

Oil crisis Gulf Crisis Asian Crisis 9/11 SARS Financial Crisis

2x 2x

Regional aviation holds str trong gr g growth th po potenti tial worldwide

27

Chorus Aviation Overview

• Resilient passenger air traffic growth

has outperformed GDP growth by ~2.0x

• ver the past 10 years 1
• 20-year world annual traffic growth

forecast of 4.4% 1

• Growth in leased aircraft fleet driven

by 2 factors:

• Increase in global fleet
• Increasing use of leased aircraft (vs owned)
• Operating leases provide more
• perational flexibility, lower financing

requirements, and no residual value risk

Air Travel expected to double from 2015 to 2025 1 Airlines increasingly dependent on operating leases 2

5 10 15 20 25 1977 1982 1987 1992 1997 2002 2007 2012 2017 2022 2027 2032 2037

2,000 000 3,1 ,100 4,7 4,700 6,1 ,100 7,3 ,300 9,40 ,400 17 17% 24% 4% 32 32% 36 36% 40 40% 43 43%

1995 2000 2005 2010 2015 2019 Oper erating l lea ease e marke rket s share re Oper erating l lea ease e fleet leet ( (es est.)

Worl rld ai airc rcraf raft fleet o

• n an

an operat rating l leas ase World annual t traffic (trillion RPK) K)

1 Airbus Global Market Forecast (2018-2037), 2 FlightGlobal (2019), includes in-service TPs, RJs, and NBs with more than 20 seats

Regional aircraft leasing is an attr ttracti tive bu business

• 50% of global passengers fly on trips shorter than 500 miles
• Regional aircraft allow airlines to optimize aircraft size

and reduce per-seat-cost

• 70-130 seat fleet expected to grow at ~3.7% per year over

the next 20 years1

• Penetration rate of operating leases is still relatively low

for regional aircraft (~25%) compared to narrow-body jets (~49%)

28

Chorus Aviation Overview

• Economic growth in emerging markets is expected to significantly
• utpace growth in advanced economies
• Fast growth of the urban middle class in emerging markets

will create opportunities for regional air travel

• Stable technology of regional aircraft reduces volatility in residual

value compared to narrow-body aircraft

• Steady historical deliveries

Es Esse sentia ial l com

• mpon
• nent of
• f

comme mmercia ial l avi viation

• n

Very r resilie silient deman and f from

• m a

a broad

• ad u

user bas ase Ge Geog

• grap

aphical ally y div iverse se d dema mand St Stable technol

• log
• gy

and s d suppl pply

1 Bombardier Market Forecast 2017-2036

1 2 3 4

5 pillars of our aircraft leasing gr growth th s str trategy gy

• Industry veterans based on 3 continents
• Strong relationships with over 100 airlines
• Seek airline customers with good credit quality and/or strong prospects
• Employ collaborative approach to working with airlines
• Build a diversified customer base

29

Chorus Aviation Overview

• Acquire modern technology, high demand, marketable aircraft
• Use sale leasebacks to build airline relationships
• Use skyline purchases to reduce aircraft acquisition costs
• Target 5 to 10 years to provide significant visibility into future
• Aim to recover cost of the aircraft over first lease
• Seek debt financing from a variety of sources
• Reserve capital for select deals to allow for opportunistic purchasing

Highly Experienced Team Customers New to Mid-Life Aircraft Long-Term Leases Low Cost of Capital

Launched third-party leasing in January 2017 to seize opportunit itie ies s in in r regio ional al air aircraft aft le leasin asing

• Provides ~$1.6B of

investment capital when levered at 3:1

• ~75% of capital

committed as of March 26, 2019

• Remaining capital

expected to be committed by early 2020

• 60% of Air Canada’s

investment allocated to leasing under the CPA

C$ 401 M raised since 2017

Net proceeds

30

Chorus Aviation Overview

C$ M

Investment from Fairfax Financial Public share

• ffering

Air Canada Investment 201 017 201 018 201 019

Note: Amounts shown above are expressed in terms of gross proceeds, except for the $401 M, which is net proceeds See cautionary statement regarding forward-looking information on slide 2

• Approximately ~US$ 645M in future contracted lease revenue 1
• Weighted average fleet age of ~3 years 2
• Weighted average remaining lease term of ~6.5 years 2
• ~87% debt is fixed rate
• Weighted average cost of borrowing of 4.52% 3

Committed fleet of 40 a 0 aircraft w t worth th US$ S$ 86 860M 0M

31

1 Includes all 40 aircraft incl. 2019 deliveries. 2 Fleet age and remaining lease term is

calculated based on the weighted-average of aircraft net book values as at 31/12/2018. 2019 deliveries not included.

3 Reflects actual borrowings as at 31/12/2018.

2019 deliveries not included. Chorus has the ability to adjust lease rate as a result of changes in variable interest rates on certain

• f its leases.
• N. A

Ame meri rica 3 A Airc rcra raft

• S. A

Ame meri rica 5 A Airc rcra raft Euro rope 10 A Airc rcra raft Afr fric ica 9 A Airc rcra raft Aus ustr tralia 3 A Airc rcra raft Asi sia 10 A Airc rcra raft Chorus Aviation Overview See cautionary statement regarding forward-looking information on slide 2

32

Chorus Aviation Overview

Chorus has rapidly become the worl rld’s 4 4th

th la

larges est regional aircraft lessor (in portfolio value)

6,025 1,750 1,325

1,200

850 575 500 350 325 300

NAC GECAS Falko Chorus DAE Elix TrueNoord Avmax CDB Avation

Chorus i s is s th the

• nly

ly lar large ge r regio gional al air aircraf aft le lessor wh whic ich is is als also an an o

• pe

perator Portfolio value (US$ B)

Source: FlightGlobal (2019); portfolio values based on half-life CMVs Chorus value includes 47 aircraft leased under the capacity purchase agreement

33

Chorus Aviation Overview

Diversification across airlines, geography and aircraft types

Tur urbo bopr props ps Regio giona nal Je l Jets

Customer Aircraft committed Dash 8 ATR CRJ Embraer Ethiopian 5



Azul 5

 

Air Nostrum 4



Lion Air 4



Jambojet 4



Philippine Airlines 3



Falcon 3



AeroMexico 3



Flybe 3



Virgin Australia 3



Cityjet 2



KLM 1



Tot

• tal

al t third-pa party ty 40 15 13 6 6 Air Canada 47

 

Gran and t tot

• tal

al 87 87 57 57 13 13 11 11 6

De Descr crip iptio ion Samp mple C Chor horus us Trans nsaction

• n

1 From lessors

Purchase of assets with attached leases from lessor’s non-core portfolio Purchase of 2 E190s with Aeromexico leases attached from Investec

2 From airlines

Sale and leaseback of existing or future aircraft deliveries Purchase of 3 new Bombardier Q400s from Philippine Airlines with concurrent long-term leaseback agreement

3 From aircraft

manufacturers

Direct purchase from manufacturers for subsequent lease to airlines Purchase of 2 Q400 turboprops directly from Bombardier with subsequent lease agreement to JamboJet Airlines

Three ways to acquire leasing assets

Chorus Aviation Overview

34

Global regional aircraft leasing market estimated at ~275 new aircraft deliveries per year1

1 Bombardier Market Forecast 2017-2036

Source: FlightGlobal (2019), Chorus Aviation estimates

Chorus holds defensive position in economic downturn

• Over 90% of revenues embedded in flight operations and

aircraft leasing long-term contracts

• Air Canada assumes risks related to commercial aspects
• +/- $2M guardrail on controllable costs
• Minimum fleet and aircraft leasing commitments

35

Chorus Aviation Overview

• Lower costs and smaller aircraft than mainline carriers
• Aircraft leasing provides operational flexibility, reduces

financing requirements and eliminates risk on aircraft residual value

• Rigorous evaluation process
• Strong diversification of aircraft type and geography
• Diversified customer base with good credit rating
• Mature and efficient regional aircraft
• Ability to fly, lease, sell, modify, disassembly and part-out

aircraft

Visibility on future revenues and costs Protected profit margin under CPA Better suited to serve reduced market demand Conservative approach to leasing business Valuable aircraft lifecycle

See cautionary statement regarding forward-looking information on slide 2

Appendix 2

Supplemental information

6

Appendix 1

Financial Statements

5

Conclusion

4

Regional Aircraft Leasing

3

Regional Aviation Services

2

Chorus Overview

Contents

Chorus Aviation Overview

36

1

1 2 3

Chorus is ver ery wel ell po positi tioned t ed to gr grow sig ignif nific icant ntly ly in in the he regio iona nal a l air ircraft le leasing ing bus usine iness, led by a very strong team of industry veterans and supported by internal expertise and capabilities in regional aviation services Chorus is committed to grow it its r regio iona nal l avia iatio ion s n serv rvic ices, both inside and outside the CPA Ch Chorus has a pr predi edicta ctabl ble r e reven enue e str trea eam, with a business model based

• n long-term contracts, less exposed

to downturns than main line carriers and lessors

Chorus Aviation Overview

Conclusion

37

Appendix 2

Supplemental information

6

Appendix 1

Financial Statements

5

Conclusion

4

Regional Aircraft Leasing

3

Regional Aviation Services

2

Chorus Overview

Contents

Chorus Aviation Overview

38

1

Chorus Aviation Overview

39

Consolidated Income Statement

For the years ended December 31, 2018 and 2017

Expressed in thousands of Canadian dollars, except earnings per share

Operating revenue 1,451,194 1,352,200

Operating expenses Salaries, wages and benefits 443,332 444,993 Depreciation and amortization 120,687 103,244 Aircraft maintenance materials, supplies and services 240,744 192,639 Airport and navigation fees 170,180 167,147 Aircraft rent 98,023 99,390 Terminal handling services 21,720 27,907 Other 139,867 143,834 1,234,553 1,179,154

Operating income 216,641 173,046

Non-operating (expenses) income Interest revenue 2,924 2,246 Interest expense (59,209) (45,757) Loss on disposal of property and equipment (164) (125) Foreign exchange (loss) gain (56,530) 53,886 Other 500 687 (112,479) 10,937

Income before income taxes 104,162 183,983

Income tax expense Current income tax (2,133) (1,589) Deferred income tax (35,041) (15,071) (37,174) (16,660)

Net income 66,988 167,323

Earnings per share, basic 0.49 1.36 Earnings per share, diluted 0.48 1.33

2018 2017

Chorus Aviation Overview

40

Consolidated Income Statement

Fourth quarter 2018 and 2017

Operating Revenue 358,663 356,033 2,630 0.7 1,451,194 1,352,200 98,994 7.3

Operating Expenses 297,402 305,872 (8,470) (2.8) 1,234,553 1,179,154 55,399 4.7

Operating income 61,261 50,161 11,100 22.1 216,641 173,046 43,595 25.2

Net interest expense (14,447) (13,341) (1,106) (8.3) (56,285) (43,511) (12,774) (29.4) Foreign exchange (loss) gain (33,806) (7,958) (25,848) (324.8) (56,530) 53,886 (110,416) 204.9 Other 22 59 (37) 62.7 336 562 (226) (40.2)

Earnings before Income tax 13,030 28,921 (15,891) (54.9) 104,162 183,983 (79,821) (43.4)

Income tax expense (11,011) (8,918) (2,093) (23.5) (37,174) (16,660) (20,514) (123.1)

Net income 2,019 20,003 (17,984) (89.9) 66,988 167,323 (100,335) (60.0) Adjusted EBITDA 92,608 82,915 9,693 11.7 342,692 286,912 55,780 19.4 Adjusted EBT 46,116 32,536 13,580 41.7 159,008 132,091 26,917 20.4 Adjusted Net Income 35,105 23,618 11,487 48.6 121,834 115,431 6,403 5.5

Expressed in thousands

• f Canadian dollars

Three months ended December 31, Year ended December 31, 2018 2017 Change Change 2018 2017 Change Change $ $ $ % $ $ $ %

Chorus Aviation Overview

41

Consolidated Statements of Financial Position

As at December 31 Expressed in thousands of Canadian dollars

Assets

Current assets Cash 92,592 78,007 Accounts receivable – trade and other 77,097 77,397 Inventories 55,691 51,543 Prepaid expenses and deposits 13,535 12,920 Income tax receivable 704 2,268 Total current assets 239,619 222,135 Restricted cash 20,081 13,625 Property and equipment 2,001,099 1,742,674 Intangibles 2,088 2,392 Goodwill 7,150 7,150 Deferred income tax asset 4,295 3,022 Other long-term assets 41,693 33,647 2, 2,316,025 25 2, 2,024 24,645

Liabilities

Current liabilities Accounts payable and accrued liabilities 190,311 210,809 Current portion of obligations under finance leases 3,117 2,762 Current portion of long-term incentive plan 4,087 5,844 Current portion of long-term debt 142,652 118,567 Current portion of consideration payable — 4,387 Dividends payable 5,657 5,014 Income tax payable 930 — Total current liabilities 346,754 347,383 Obligations under finance leases 2,558 5,219 Long-term debt 1,102,783 995,062 Convertible units 194,294 193,540 Deferred income tax liability 172,254 135,740 Other long-term liabilities 67,595 65,679 1,886,238 1,742,623

Equity

429,787 282,022 2,316,025 2,024,645

2018 2017

Chorus Aviation Overview

42

Seg egmen ented ed Fi Financial S Statem emen ent

Yea ear E Ended ed D Dec ecem ember er 3 31, 2 2018

Operating revenue 1,371,354 79,840 1,451,194 1,322,816 29,384 1,352,200 Operating expenses 1,194,799 39,754 1,234,553 1,160,216 18,938 1,179,154 Operatin ing in income 176,555 40,086 216,641 162,600 10,446 173,046 Net interest expense (36,569) (19,716) (56,285) (36,838) (6,673) (43,511) Foreign exchange (loss) gain (57,123) 593 (56,530) 57,892 (4,006) 53,886 Other(1) 336 — 336 562 — 562 Earnings (loss) before income tax 83,199 20,963 104,162 184,216 (233) 183,983 Income tax expense (34,311) (2,863) (37,174) (16,584) (76) (16,660) Net in income ( (lo loss) 4 48, 8,888 888 1 18,100 00 66, 66,98 988 1 167 67,63 632 ( (309) 9) 1 167,32 323 3 Operatin ing in income 176,555 40,086 216,641 162,600 10,446 173,046 Depreciation and amortization(2) 91,827 28,860 120,687 92,011 11,233 103,244 Employee separation(2) 5,364 — 5,364 10,622 — 10,622 Adj djusted E d EBITDA(3)

3)

2 273 73,74 746 68 68,94 946 6 3 342,692 692 2 265,233 33 2 21,67 679 9 2 286, 6,91 912 Earnin ings ( (lo loss) b before in income t tax 83,199 20,963 104,162 184,216 (233) 183,983 Unrealized foreign exchange loss (gain) 49,482 — 49,482 (60,868) — (60,868) Employee separation program 5,364 — 5,364 10,622 — 10,622 Foreign exchange gain on cash held for deposit — — — (1,646) — (1,646) Adj djusted E d EBT(3)

3)

1 138,045 45 2 20,963 963 1 159,008 008 1 132 32,32 324 ( (233) 33) 13 132,091 1

For t the y e yea ear en ended ed D Dec ecem ember er 3 31, 2 2018 For t the y e yea ear en ended ed D Dec ecem ember er 3 31, 2 2017

(in thousands of Canadian dollars)

Regio ional l Avia iatio ion Ser ervices es Regio ional l Airc rcra raft t Le Leasing Total al Regio ional l Avia iatio ion Ser ervices es Regio ional l Airc rcra raft t Le Leasing Total al $ $ $ $ $ $

Chorus Aviation Overview

43

Seg egmen ented ed Fi Financial S Statem emen ent

Three M ee Months E Ended ed D Dec ecem ember er 3 31, 2 2018

Operating revenue 335,640 23,023 358,663 340,918 15,115 356,033 Operating expenses 287,024 10,378 297,402 295,502 10,370 305,872 Operatin ing in income 48,616 12,645 61,261 45,416 4,745 50,161 Net interest expense (8,710) (5,737) (14,447) (9,604) (3,737) (13,341) Foreign exchange (loss) gain (34,257) 451 (33,806) (7,132) (826) (7,958) Other(1) 22 — 22 59 — 59 Earnings before income tax 5,671 7,359 13,030 28,739 182 28,921 Income tax expense (10,506) (505) (11,011) (8,159) (759) (8,918) Net ( (lo loss) in income ( (4, 4,835) 6 6,854 4 2 2,0 ,019 2 20, 0,580 ( (577) 77) 2 20, 0,003 003 Operatin ing in income 48,616 12,645 61,261 45,416 4,745 50,161 Depreciation and amortization(2) 23,048 8,082 31,130 25,874 5,623 31,497 Employee separation(2) 217 — 217 1,257 — 1,257 Adj djusted E d EBITDA(3)

3)

7 71,881 881 2 20,72 727 7 92 92,60 608 72 72,547 7 1 10,3 ,368 8 82,9 ,915 Earnings b bef efore i e income t e tax 5,671 7,359 13,030 28,739 182 28,921 Unrealized foreign exchange loss 32,869 — 32,869 2,358 — 2,358 Employee separation program 217 — 217 1,257 — 1,257 Adj djusted E d EBT(3)

3)

3 38,75 757 7 7, 7,359 4 46, 6,116 6 32 32,35 354 1 182 82 32 32,536 36

For t the t e three m ee months en ended ed D Dec

• ec. 3

31, 2 2018 For t the t e three m ee months en ended ed D Dec

• ec. 3

31, 2 2017

(in thousands of Canadian dollars)

Regio ional l Avia iatio ion Ser ervices es Regio ional l Airc rcra raft t Le Leasing Total al Regio ional l Avia iatio ion Ser ervices es Regio ional l Airc rcra raft t Le Leasing Total al $ $ $ $ $ $

Appendix 2

Supplemental information

6

Appendix 1

Financial Statements

5

Conclusion

4

Regional Aircraft Leasing

3

Regional Aviation Services

2

Chorus Overview

Contents

Chorus Aviation Overview

44

1

Opportunities for incremental revenue at end of leases under the CPA

• Current lease commitments beyond 2025 leave substantial room for

additional lease extensions/renewals on current and possibly new aircraft to Air Canada in amended CPA

• Lease expiry of each aircraft is concurrent with full debt repayment; no

exposure for Chorus on debt

• 19 Q400 aircraft have lease terms expiring from end of 2025 to

end of 2028

• Put and call rights to Air Canada in 2025 no longer applicable due to CPA extension

to 2035

45

Chorus Aviation Overview

Significant leasing

• pportunity

as each aircraft lease under the CPA expires

Year end nd f fleet c count

• unts

20 2019 20 2020 20 20 2021 21 20 2022 22 20 2023 23 20 2024 24 20 2025 25 20 2026 26 20 2027 27 20 2028 28 20 2029 29 20 2030 20 2031 20 2032 20 2033 20 2034 20 2035 Chorus-owned 75-78 seat aircraft earning leasing revenue under CPA 39 481 48 48 45 45 501 44 39 31 26 26 14 5 5 5 5 Chorus-owned Dash 8-300 aircraft2 (50-seat aircraft) earning leasing revenue under CPA 16 17 18 19 19 19 19

• Chorus-owned aircraft with expired leases 3, 4
• 3

3 3 28 33 41 46 46 58 67 67 67 67 To Total 55 55 65 65 66 66 67 67 67 67 67 67 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72

1 Includes 9 CRJ900s acquired and leased in 2020 and 5 aircraft to be determined acquired and leased in 2025. 2 As of January 14, 2019, the Extended Service Program was completed on eight Dash 8-300s which are earning lease revenue under the CPA. The remaining 11

aircraft will gradually be completed by December 31, 2022 and will earn lease revenue under the amended CPA.

3 Owned Chorus aircraft that have their lease expire under the amended CPA. These aircraft have the potential for re-lease with Air Canada or other third

parties, sale or part out.

4 Aircraft debt is fully paid off with each lease expiry, including the 3 Q400s removed in 2023.

Aver erage e of 3 33 Aver erage e of 7 7 Aver erage e of 5 52

Minimum CPA fleet commitment provides certainty

• Enhanced relevance to Air Canada

with CRJ200 regional AC Express capacity reallocated to Jazz

• Further fleet modernization and

transition to larger gauge equipment with the Dash 8-100s exiting the fleet earlier

• All owned Dash 8-300 aircraft

maintained as covered fleet until 2025

• Minimum fleet of 105 determines

fixed fee revenue floor; set at $75.5 million in each of 2019 and 2020, given substantial fleet transitions and averages $61.6 million from 2021

• 2025
• Minimum covered fleet of 80 aircraft

in the 75-78 seat range provides minimum revenue floor of $399 million over extended term from 2026-35

Significant regional network footprint under amended CPA

46

Chorus Aviation Overview

Amende ded d CPA 2019 2020 2021 2022 2023 2024 2025 2026 6 Onw nwar ard DASH 8-100

• DASH 8-300

19 19 19 19 19 19 19

• CRJ900

35 35 35 35 35 35 35

• Q400

36 36 36 36 36 36 36

• CRJ200

15 15 15 15 15 15 15

• Type TBD

80 TO TOTA TAL 105 105 105 105 105 105 105 80 Previous us C CPA 2019 2020 2021 2022 2023 2024 2025 2026 6 Onw nwar ard DASH 8-100 15 15 12 12 4 1

• DASH 8-300

26 26 26 26 26 26 26

• CRJ900

21 21 21 21 21 21 21

• Q400

44 49 49 49 49 49 49

• CRJ200

10

• TO

TOTA TAL 116 16 111 11 108 108 100 97 97 96 96

• Oper

erating aircraft in fleet eet m may b be e higher er than the m e minimum cover ered ed f fleet eet commitment, p par articular arly i y in the ear arly y ye year ars as as fleet tran ansition o

• ccurs

Jazz is widel ely rec ecogni nized ed for i r its e excel ellenc ence, both as an employer and operator

• Canada’s Safest Employers 2018
• Silver in Transportation cat.
• Silver Psychological Safety cat.
• Canada’s Top Employers for

Young People 2018 - 2014

• Canada’s Best Diversity

Employers 2018 - 2012

• Atlantic Canada’s Top 25

Employers 2018 - 2012

• Nova Scotia’s Top 15 Employers

2018 - 2012

• 2018 Employee Recommended

Workplace - The Globe and Mail & Morneau Shepell

2018 2017

47

Chorus Aviation Overview

2015 2017 - 2015

• Canada’s Safest Employers 2017

Gold in Transportation cat.

• APEX award for “Excellence in

Publication” - Focus on Safety

• Top Airline Reliability

Performance Awards

• One of North America’s top five
• n-time performing regional

airlines