BUSINESS

Chorus Aviation reports $22.9M second-quarter profit, up from $16.9M a year ago

08/13/2012 03:49 EDT | Updated 10/13/2012 05:12 EDT
HALIFAX - Regional airline Chorus Aviation Inc. (TSX:CHR.B, TSX:CHR.A) said Monday that it earned $22.9 million in its latest quarter, up from $16.9 million a year ago, as revenue improved.

The company, which provides regional flights for Air Canada, said the profit amounted to 18 cents per share for the second quarter, up from 14 cents per share a year ago.

Operating revenue increased to $426.3 million from $402.0 million, up six per cent from a year ago.

Excluding pass-through costs, Chorus said revenue was up 10.8 per cent due to $9 million related to the early termination of the Thomas Cook flight services agreement, rate increases, a higher U.S. dollar exchange rate and an increase in incentives earned under the airline's deal with Air Canada.

Last month, Chorus announced a plan to rejuvenate its fleet by adding six new Bombardier (TSX:BBD.B) Q400 NextGen airplanes that would be operated by its Jazz Aviation subsidiary under the Air Canada Express brand.

However, the acquisition will result in the closing of a heavy maintenance base in London, Ont.

About 200 people will be affected by the closure — 150 CAW union members and 50 management staff — but workers will be offered employment at other locations based on seniority, with an end result of 55 fewer maintenance workers at Jazz.

The base is expected to close next summer, leaving Jazz with one heavy maintenance base in Halifax.

"By increasing the number of newer aircraft in the Jazz fleet, the requirement for heavy maintenance work is reduced," Chorus Aviation president and chief executive Joseph Randell said Monday.

"While we recognize the impact of this decision is difficult for a number of our employees, it is the right direction to take if we are to become more cost competitive and remain relevant in this industry as the competitive landscape continues to change."