Chorus Aviation announced strong Q3/16 results, and a pending transaction with Air Nostrum, a franchise partner of Iberia, for the lease of four new Bombardier CRJ1000 regional jets.

Chorus is seeking opportunities to increase its regional aircraft leasing activity outside of the CPA as management recognizes regional aircraft leasing as a growing market segment with few established providers. Chorus plans to purchase and lease four new CRJ1000 regional jets to Air Nostrum, and has secured a letter of offer from Export Development Canada (EDC) for debt financing of up to 80% of the net purchase price of each CRJ1000.

The four aircraft are scheduled to be delivered in November and December 2016, and in July and October 2017. Founded in 1994, and headquartered in Valencia, Spain, Air Nostrum is a European regional airline carrying over 4 million passengers annually. With a fleet of 42 modern CRJ and ATR aircraft, Air Nostrum operates over 75,000 flights annually to 54 domestic and international destinations. Since 1997 Air Nostrum has been a franchise partner of Iberia, a Spanish national and international carrier, and is an affiliate of the oneworld airline alliance.

“This initial leasing arrangement, with a high-quality regional carrier, is a meaningful step and good progress in our strategy to diversify our aircraft leasing revenue over and above our CPA with Air Canada,” commented Joe Randell, president and CEO, Chorus.

Chorus expects definitive documentation for the EDC loan facility and leases with Air Nostrum for the 2016 aircraft deliveries to be completed in Q4/16.  These transactions remain subject to the successful negotiation and execution of definitive agreements and related documentation.

“I am pleased to report the seventh consecutive quarter of strong financial and operational performance under the revised Capacity Purchase Agreement (CPA) with Air Canada,” said Randell. “Progress was made in advancing our revenue diversification strategy as evidenced by a 51.0% increase quarter-over-quarter in our aircraft leasing revenue under the CPA. Year-to-date aircraft leasing revenue has grown to $72.0 million, or by approximately 47.0%. Our focus in the third quarter centered on advancing the business diversification strategy, improving Jazz’s cost competitiveness, fleet modernization, and establishing Voyageur’s Avparts business, as we continue to create additional, long-term value for our shareholders.”