Chorus to be sold ?

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mbav8r
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Re: Chorus to be sold ?

Post by mbav8r »

Localizer wrote: Mon Oct 26, 2020 5:29 am I don’t think that would happen, that road was taken the last time AC owned the regionals and a judge decided they were not “common employer”. In the US, mainline carriers own regionals with separate seniority list, just a better flow through agreement.

This is 2020 so who knows what will happen.
With one exception, the AC pilot contract has an ownership clause, in a nutshell if AC owns 30% of another airline those pilots will be on the ACPA list. At least that is how it was explained to me, I’ll see if I can find it.

“ Merger means any action that either directly or indirectly results in: the acquisition, or the right to acquire, by the Company or its Affiliates of more than 30% of the shares of another Canadian air carrier; the acquisition, or the right to acquire, by any entity or coalition of entities of more than 30% of the shares of the Company; the merger or amalgamation of all or part of the Company with another Canadian air carrier”
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Inverted2
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Re: Chorus to be sold ?

Post by Inverted2 »

Well let’s not get too carried away yet. We don’t know who it is or even if it will go through at all. If it were AC, I’d be happy if the lists were to remain separate though. I chose to stay at Jazz and have no desire to “fly the big planes” someday.
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mbav8r
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Re: Chorus to be sold ?

Post by mbav8r »

Inverted2 wrote: Mon Oct 26, 2020 7:36 am Well let’s not get too carried away yet. We don’t know who it is or even if it will go through at all. If it were AC, I’d be happy if the lists were to remain separate though. I chose to stay at Jazz and have no desire to “fly the big planes” someday.
Same here, I would much prefer to be a separate company under our current contract, I’m just pointing out the language in ACPA’s agreement, I’m sure AC pilots would be happy to modify that to keep us off their list. The language exist so AC can’t own another airline and play the pilots off each other, we have the same language however the Voyageur pilots are still not.
Obviously that means exceptions can be made.
Also, as you pointed out, we don’t know who this third party is, hopefully because it’s out there more information will come sooner rather than later.
I admit, it’s fun trolling some of the AC pilots on here though
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truedude
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Re: Chorus to be sold ?

Post by truedude »

I think if it was AC, a lot of us who have been at Jazz for a long time, would prefer to keep things separate. I have no desire to wade into the multi year mess that a list merger would bring. It would interfere greatly with my zen, and likely increase my beer consumption.

But I would love the irony of it all, if this was CR's answer to the ACPA scope grievance. Buy us, and force a list merger (given any contract modification would require the company to agree as well as ACPA).

But from my perspective, I am happy with my life, happy with my schedule, happy with my Victoria overnights, and would feel content doing what I do until retirement.
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mbav8r
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Re: Chorus to be sold ?

Post by mbav8r »

truedude wrote: Mon Oct 26, 2020 10:11 am I think if it was AC, a lot of us who have been at Jazz for a long time, would prefer to keep things separate. I have no desire to wade into the multi year mess that a list merger would bring. It would interfere greatly with my zen, and likely increase my beer consumption.

But I would love the irony of it all, if this was CR's answer to the ACPA scope grievance. Buy us, and force a list merger (given any contract modification would require the company to agree as well as ACPA).

But from my perspective, I am happy with my life, happy with my schedule, happy with my Victoria overnights, and would feel content doing what I do until retirement.
Is there anything wrong with increased beer consumption? I’m asking for a friend;)
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truedude
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Re: Chorus to be sold ?

Post by truedude »

mbav8r wrote: Mon Oct 26, 2020 10:44 am
truedude wrote: Mon Oct 26, 2020 10:11 am I think if it was AC, a lot of us who have been at Jazz for a long time, would prefer to keep things separate. I have no desire to wade into the multi year mess that a list merger would bring. It would interfere greatly with my zen, and likely increase my beer consumption.

But I would love the irony of it all, if this was CR's answer to the ACPA scope grievance. Buy us, and force a list merger (given any contract modification would require the company to agree as well as ACPA).

But from my perspective, I am happy with my life, happy with my schedule, happy with my Victoria overnights, and would feel content doing what I do until retirement.
Is there anything wrong with increased beer consumption? I’m asking for a friend;)
Gets expensive! Though I suppose of a deal goes through, I should have a few extra bucks in my pocket from the stock.
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Inverted2
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Re: Chorus to be sold ?

Post by Inverted2 »

I downgraded to “Carling”. It’s the Rouge of beers. Not fancy but it works, and cheap(er) during these difficult times. :lol:
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Re: Chorus to be sold ?

Post by spinaxis »

truedude wrote: Mon Oct 26, 2020 10:11 am I think if it was AC, a lot of us who have been at Jazz for a long time, would prefer to keep things separate. I have no desire to wade into the multi year mess that a list merger would bring. It would interfere greatly with my zen, and likely increase my beer consumption.

But I would love the irony of it all, if this was CR's answer to the ACPA scope grievance. Buy us, and force a list merger (given any contract modification would require the company to agree as well as ACPA).

But from my perspective, I am happy with my life, happy with my schedule, happy with my Victoria overnights, and would feel content doing what I do until retirement.
Wouldn't you be able to just stay on your plane and do the same thing? I imagine if there's a merger there would also be some kind of fencing of positions? Isn't that how it normally goes?
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truedude
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Re: Chorus to be sold ?

Post by truedude »

spinaxis wrote: Mon Oct 26, 2020 11:56 am
truedude wrote: Mon Oct 26, 2020 10:11 am I think if it was AC, a lot of us who have been at Jazz for a long time, would prefer to keep things separate. I have no desire to wade into the multi year mess that a list merger would bring. It would interfere greatly with my zen, and likely increase my beer consumption.

But I would love the irony of it all, if this was CR's answer to the ACPA scope grievance. Buy us, and force a list merger (given any contract modification would require the company to agree as well as ACPA).

But from my perspective, I am happy with my life, happy with my schedule, happy with my Victoria overnights, and would feel content doing what I do until retirement.
Wouldn't you be able to just stay on your plane and do the same thing? I imagine if there's a merger there would also be some kind of fencing of positions? Isn't that how it normally goes?
It is. It isn't the loss of position that would be concerning, but the hostility that would naturally emerge from a protracted seniority merger. If Jazz is bought, and IF it is Air Canada, and IF the lists were merged (all big IF's) there is no way it would end with everyone happy. ACPA would argue bottom of the list, ALPA would argue for DOH, both would make the case to an arbitrator, who would then sit down and try to sort out what is "fair."

Some would be bitter for the rest of their careers, with others bitter until they die. Like I said, it would interfere with my Zen.
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Re: Chorus to be sold ?

Post by KenoraPilot »

Inverted2 wrote: Mon Oct 26, 2020 7:36 am Well let’s not get too carried away yet. We don’t know who it is or even if it will go through at all. If it were AC, I’d be happy if the lists were to remain separate though. I chose to stay at Jazz and have no desire to “fly the big planes” someday.
I 100% agree, I would love to remain separate, zero interest in being on AC list.
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Sharklasers
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Re: Chorus to be sold ?

Post by Sharklasers »

AC says the offer didnt come from them. I guess you can put away the balloons.

https://www.theglobeandmail.com/busines ... ed-chorus/

Its probably a PE firm. Could get pretty bleak.
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truedude
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Re: Chorus to be sold ?

Post by truedude »

Sharklasers wrote: Mon Oct 26, 2020 6:26 pm AC says the offer didnt come from them. I guess you can put away the balloons.

https://www.theglobeandmail.com/busines ... ed-chorus/

Its probably a PE firm. Could get pretty bleak.
Sorry, a single unsourced sentence doesn't quite do it for me. Air Canada has issued no official press release, and the article doesn't even state where he got that information from. I'll wait for something official, or at leased a sourced comment.
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Fanblade
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Re: Chorus to be sold ?

Post by Fanblade »

You only have to be on the ACPA seniority list to fly aircraft above the scope benchmarks in the collective agreement. Below that gauge of aircraft there is no need to be on the seniority list to operate on behalf of AC.

AC has owned Jazz in the past.
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truedude
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Re: Chorus to be sold ?

Post by truedude »

Fanblade wrote: Mon Oct 26, 2020 6:57 pm You only have to be on the ACPA seniority list to fly aircraft above the scope benchmarks in the collective agreement. Below that gauge of aircraft there is no need to be on the seniority list to operate on behalf of AC.

AC has owned Jazz in the past.
Sounds that the four of us at least all agree.
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Fanblade
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Re: Chorus to be sold ?

Post by Fanblade »

mbav8r wrote: Mon Oct 26, 2020 6:51 am
Localizer wrote: Mon Oct 26, 2020 5:29 am I don’t think that would happen, that road was taken the last time AC owned the regionals and a judge decided they were not “common employer”. In the US, mainline carriers own regionals with separate seniority list, just a better flow through agreement.

This is 2020 so who knows what will happen.
With one exception, the AC pilot contract has an ownership clause, in a nutshell if AC owns 30% of another airline those pilots will be on the ACPA list. At least that is how it was explained to me, I’ll see if I can find it.

“ Merger means any action that either directly or indirectly results in: the acquisition, or the right to acquire, by the Company or its Affiliates of more than 30% of the shares of another Canadian air carrier; the acquisition, or the right to acquire, by any entity or coalition of entities of more than 30% of the shares of the Company; the merger or amalgamation of all or part of the Company with another Canadian air carrier”
You posted the definition of merger in the CBA.

Read Merger or change of control for clarity. It clearly contemplates mainline merger.
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hithere
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Re: Chorus to be sold ?

Post by hithere »

Fanblade
Could you please paste the relevant sections of “Merger or change of control “ for us Jazz pilots? It would obviously be of interest to Transat pilots
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rudder
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Re: Chorus to be sold ?

Post by rudder »

Sharklasers wrote: Mon Oct 26, 2020 6:26 pm AC says the offer didnt come from them. I guess you can put away the balloons.

https://www.theglobeandmail.com/busines ... ed-chorus/

Its probably a PE firm. Could get pretty bleak.
So ‘unsolicited’ could also be construed as ‘hostile’?

If CHR and the potential acquirer do not reach terms, then the potential acquirer could still try to take up shares without a BOD recommendation. However, the CHR BOD (with the support of the shareholders) could dilute the stock using the poison pill provision adopted in April 2020.

With a massive stock price drop mostly related to the suspension of the dividend, CHR knew then that they might become a takeover target.

Lots of hedge funds out there looking for opportunities (remember Cerberus?). Their ROI was 300% in the AC restructuring which gutted AC by selling off all of the other former AC assets via ACE.

Ultimately, it will be up to the CHR shareholders to decide if they want to sell. The CHR BOD has a fiduciary obligation to maximize shareholder value, including sale. What the buyer wants to do with the assets rarely factors in to that decision. It will be a competition between those that believe the CHR stock price will eventually recover and that the dividend will eventually be restored, and those that do not.

The offer may have come with some onerous or unrealistic conditions. However, the CHR BOD has an obligation to consider, particularly if it represents a higher return for shareholders than status quo.

An auction scenario remains a possibility.

With AC having a seat on the CHR BOD, it will be having direct input in to this process and perhaps the outcome as a 10% shareholder.
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JoeyBarton
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Re: Chorus to be sold ?

Post by JoeyBarton »

rudder wrote: Tue Oct 27, 2020 5:04 am
Sharklasers wrote: Mon Oct 26, 2020 6:26 pm AC says the offer didnt come from them. I guess you can put away the balloons.

https://www.theglobeandmail.com/busines ... ed-chorus/

Its probably a PE firm. Could get pretty bleak.
So ‘unsolicited’ could also be construed as ‘hostile’?

If CHR and the potential acquirer do not reach terms, then the potential acquirer could still try to take up shares without a BOD recommendation. However, the CHR BOD (with the support of the shareholders) could dilute the stock using the poison pill provision adopted in April 2020.

With a massive stock price drop mostly related to the suspension of the dividend, CHR knew then that they might become a takeover target.

Lots of hedge funds out there looking for opportunities (remember Cerberus?). Their ROI was 300% in the AC restructuring which gutted AC by selling off all of the other former AC assets via ACE.

Ultimately, it will be up to the CHR shareholders to decide if they want to sell. The CHR BOD has a fiduciary obligation to maximize shareholder value, including sale. What the buyer wants to do with the assets rarely factors in to that decision. It will be a competition between those that believe the CHR stock price will eventually recover and that the dividend will eventually be restored, and those that do not.

The offer may have come with some onerous or unrealistic conditions. However, the CHR BOD has an obligation to consider, particularly if it represents a higher return for shareholders than status quo.

An auction scenario remains a possibility.

With AC having a seat on the CHR BOD, it will be having direct input in to this process and perhaps the outcome as a 10% shareholder.
So what kind of timeline are we looking at here?
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Re: Chorus to be sold ?

Post by altiplano »

Sharklasers wrote: Mon Oct 26, 2020 6:26 pm AC says the offer didnt come from them. I guess you can put away the balloons.

https://www.theglobeandmail.com/busines ... ed-chorus/

Its probably a PE firm. Could get pretty bleak.
For anyone that can't get past the Globe's paywall...
Financial company likely the unnamed bidder for Halifax-based Chorus Aviation
ERIC ATKIN S
TRANSPORTATION REPORTER


A financial investor, not a rival airline, is likely the suitor of Halifax-based aircraft lessor and operator Chorus Aviation, which on Friday said it had received a takeover offer from an unnamed bidder, analysts say.

Chorus’s share price on Monday gave back some of the gains it made on Friday, when its stock shot up by 34 per cent as the company said it had received a “preliminary, non-binding acquisition proposal from a third party that is subject to a number of significant conditions.”

The shares fell by 4 per cent to close at $3.05 on the Toronto Stock Exchange, giving Chorus a market value of $515-million. That is much less than the price of about $8 at the beginning of the year, before the COVID-19 pandemic upended the global economy and collapsed demand for air travel.

STORY CONTINUES BELOW ADVERTISEMENT

Chorus, which bills itself as Canada’s largest regional airline, leases 56 aircraft to global carriers and operates about 70 planes as charter airline Voyageur Aviation and as Jazz Aviation, a regional carrier that flies as Air Canada Express.

Walter Spracklin, a Royal Bank of Canada stock analyst, said he is not surprised Chorus is a takeover target, with its attractive valuation, unique business model and “generally resilient cash flow.” In a note to clients, Mr. Spracklin said he believes the unnamed bidder is a domestic financial investor, rather than a rival airline operator, given the sorry state of the aviation industry and Canada’s 49-per-cent foreign ownership cap in air carriers. Individual foreign shareholders are limited to 25 per cent.

Konark Gupta, a Bank of Nova Scotia analyst, said Chorus’s plane-leasing business would be attractive to private equity firms, aircraft lessors, pension funds or fixed-income investors. “We think the potential bidder has to be a Canadian entity to acquire 100 per cent of [Chorus], otherwise the airline operations may be left out of the transaction for potential sale to Canadian entities,” Mr. Gupta said.

Chorus earns a majority of its revenue from Air Canada, on whose behalf it flies Jazz domestic flights and cross-border routes to the United States, in addition to operating Canadian regional airports. Air Canada last year extended its capacity purchase agreement with Chorus until 2035 and invested $100-million in Class A and B shares at $6.25 apiece, which made it a 10-per-cent owner. “The 17-year contract will provide Jazz $2.5-billion in minimum contracted revenues, of which $1.6-billion ... will be generated from aircraft leasing revenue,” Air Canada said at the time.

Air Canada said Monday it is not the bidder for Chorus.

Chorus did not respond to two interview requests on Monday. “There can be no assurance that any transaction will occur or as to the timing, structure or terms of any transaction. Chorus does not intend to make further comment unless or until there is a transaction to announce,” the company said in a statement Friday.

For its second quarter ended June 30, Chorus had revenue of $184-million, down from $332-million in the same period in 2019. Profit for the quarter was $29-million, or 18 cents a share, compared with $38-million (25 cents).

STORY CONTINUES BELOW ADVERTISEMENT

Chorus’s fleet consists of regional jets and turboprop aircraft, including the Airbus A220, De Havilland Dash 8 and Bombardier CRJ.

As the pandemic hammered demand for air travel, Chorus laid off 3,000 of its 4,800 employees and accepted a loan of up to $200-million from Export Development Canada, a federal government agency.

Three of Chorus’s customer airlines, Ireland’s CityJet, Aeromexico and Virgin Australia, have either sought creditor protection or terminated aircraft leases in recent months.

On June 30, Air Canada said it’s ending operations at eight regional airports, including North Bay, Ont., and Bathurst, N.B., all of which it paid Chorus to run. Air Canada also cancelled 30 regional routes – 21 of which Chorus flew as Jazz.
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genetic jack hammer
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Re: Chorus to be sold ?

Post by genetic jack hammer »

altiplano wrote: Tue Oct 27, 2020 5:47 am
Sharklasers wrote: Mon Oct 26, 2020 6:26 pm AC says the offer didnt come from them. I guess you can put away the balloons.

https://www.theglobeandmail.com/busines ... ed-chorus/

Its probably a PE firm. Could get pretty bleak.
For anyone that can't get past the Globe's paywall...
Financial company likely the unnamed bidder for Halifax-based Chorus Aviation
ERIC ATKIN S
TRANSPORTATION REPORTER


A financial investor, not a rival airline, is likely the suitor of Halifax-based aircraft lessor and operator Chorus Aviation, which on Friday said it had received a takeover offer from an unnamed bidder, analysts say.

Chorus’s share price on Monday gave back some of the gains it made on Friday, when its stock shot up by 34 per cent as the company said it had received a “preliminary, non-binding acquisition proposal from a third party that is subject to a number of significant conditions.”

The shares fell by 4 per cent to close at $3.05 on the Toronto Stock Exchange, giving Chorus a market value of $515-million. That is much less than the price of about $8 at the beginning of the year, before the COVID-19 pandemic upended the global economy and collapsed demand for air travel.

STORY CONTINUES BELOW ADVERTISEMENT

Chorus, which bills itself as Canada’s largest regional airline, leases 56 aircraft to global carriers and operates about 70 planes as charter airline Voyageur Aviation and as Jazz Aviation, a regional carrier that flies as Air Canada Express.

Walter Spracklin, a Royal Bank of Canada stock analyst, said he is not surprised Chorus is a takeover target, with its attractive valuation, unique business model and “generally resilient cash flow.” In a note to clients, Mr. Spracklin said he believes the unnamed bidder is a domestic financial investor, rather than a rival airline operator, given the sorry state of the aviation industry and Canada’s 49-per-cent foreign ownership cap in air carriers. Individual foreign shareholders are limited to 25 per cent.

Konark Gupta, a Bank of Nova Scotia analyst, said Chorus’s plane-leasing business would be attractive to private equity firms, aircraft lessors, pension funds or fixed-income investors. “We think the potential bidder has to be a Canadian entity to acquire 100 per cent of [Chorus], otherwise the airline operations may be left out of the transaction for potential sale to Canadian entities,” Mr. Gupta said.

Chorus earns a majority of its revenue from Air Canada, on whose behalf it flies Jazz domestic flights and cross-border routes to the United States, in addition to operating Canadian regional airports. Air Canada last year extended its capacity purchase agreement with Chorus until 2035 and invested $100-million in Class A and B shares at $6.25 apiece, which made it a 10-per-cent owner. “The 17-year contract will provide Jazz $2.5-billion in minimum contracted revenues, of which $1.6-billion ... will be generated from aircraft leasing revenue,” Air Canada said at the time.

Air Canada said Monday it is not the bidder for Chorus.

Chorus did not respond to two interview requests on Monday. “There can be no assurance that any transaction will occur or as to the timing, structure or terms of any transaction. Chorus does not intend to make further comment unless or until there is a transaction to announce,” the company said in a statement Friday.

For its second quarter ended June 30, Chorus had revenue of $184-million, down from $332-million in the same period in 2019. Profit for the quarter was $29-million, or 18 cents a share, compared with $38-million (25 cents).

STORY CONTINUES BELOW ADVERTISEMENT

Chorus’s fleet consists of regional jets and turboprop aircraft, including the Airbus A220, De Havilland Dash 8 and Bombardier CRJ.

As the pandemic hammered demand for air travel, Chorus laid off 3,000 of its 4,800 employees and accepted a loan of up to $200-million from Export Development Canada, a federal government agency.

Three of Chorus’s customer airlines, Ireland’s CityJet, Aeromexico and Virgin Australia, have either sought creditor protection or terminated aircraft leases in recent months.

On June 30, Air Canada said it’s ending operations at eight regional airports, including North Bay, Ont., and Bathurst, N.B., all of which it paid Chorus to run. Air Canada also cancelled 30 regional routes – 21 of which Chorus flew as Jazz.
...including the Airbus A220..????
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