Chorus Aviation Inc. (ticker: CHR_A.TO, exchange: Toronto Stock Exchange (.TO))
News Release -
Jazz Air Income Fund announces fourth quarter 2005 results
HALIFAX, Feb. 10 /CNW/ - Jazz Air Income Fund (TSX: JAZ.UN) ("Jazz Air
Fund") announced the fourth quarter results of Jazz Air Limited Partnership
(Air Canada Jazz) today. These results were generated under an initial
Capacity Purchase Agreement (CPA)(1) with Air Canada that was in effect from
October 1, 2004 to December 31, 2005.
A new CPA became effective January 1, 2006. The Jazz Air Income Fund IPO
closed on February 2, 2006, and the first cash distribution to unit holders is
expected to be paid on or about March 15, 2006.
- Net income of $117.9 million.
- Operating income of $129.4 million.
- EBITDAR(2) of $227.5 million.
- Operating revenue of $1,023.2 million.
- Excluding fuel expense, unit cost of 20.5 cents per available seat
Full year-over-year comparison of results for 2005 to 2004's combined
results will be covered in the management's discussion and analysis.
- Net income of $31.5 million.
- Operating income of $33.8 million.
- EBITDAR of $66.6 million, an improvement of $31.2 million or
- Operating revenue of $304.1 million up $116.6 million or 62.2%.
- Excluding fuel expense, unit cost was 19.3 cents per available
seat mile or a reduction of 16.1%.
For the fourth quarter of 2005, Air Canada Jazz reported an operating
income of $33.8 million, an improvement of $12.1 million compared to the
operating income of $21.7 million recorded in the same quarter of 2004.
EBITDAR was $66.6 million in fourth quarter 2005 compared to $35.4 million in
the fourth quarter of 2004, an increase of $31.2 million or 88.2% which is the
result of fleet additions, increased hours of contract flying, cost control
and performance incentives earned in the latest quarter.
Operating revenue was up $116.6 million or 63%. The increase in revenues
was due to a net increase of 30 aircraft in the number of aircraft operated by
Air Canada Jazz, an increase in block hours flown by these aircraft of 32.6%,
and an increase in the pass-through costs charged to Air Canada under the CPA
of $52.4 million. For the three-month period ended December 31, 2005,
performance incentives payable by Air Canada to Air Canada Jazz under the
Initial CPA amounted to $4.5 million or 2.2% of Air Canada Jazz's scheduled
flight revenue for such period. It was agreed between Air Canada Jazz and Air
Canada that Air Canada Jazz would not receive incentive payments for the
period from October 1, 2004 to December 31, 2004.
Operating expenses increased by $104.4 million or 63% compared to the
fourth quarter of 2004, including an increase in fuel expense of $32.9 million
or 113.6%. Fuel expense is a pass-through cost charged to Air Canada under the
CPA. Capacity, as measured by available seat miles (ASM) increased by 81.5%.
Unit cost for the fourth quarter of 2005 decreased by 10.2% from fourth
quarter of 2004. Unit cost reductions were achieved in all cost categories
except fuel, aircraft rents and terminal handling services. Unit aircraft
rental costs increased quarter over quarter reflecting the 43 new aircraft
deliveries throughout 2005, less the return of seven leased Dash 8 100s during
2005 and the retirement of the last two BAe 146 aircraft as of December 31,
2004. Aircraft rental costs are reimbursed by Air Canada.
In the fourth quarter of 2005, non-operating expense amounted to
$2.3 million, this is essentially unchanged from the fourth quarter of 2004.
Gain on the disposal of property and equipment in the fourth quarter of 2005
was $1.0 million versus fourth quarter 2004 of nil.
Net income for the fourth quarter of 2005 was $31.5 million compared to
net income of $18.4 million recorded in the fourth quarter of 2004, an
improvement of $13.1 million. The increase is due to an increased fleet,
effective cost control and performance incentives earned under the initial CPA
in the latest quarter; such incentives were not paid in the comparable period
"Overall, we are pleased with our performance for this quarter," said
Joseph Randell, President and Chief Executive Officer of Air Canada Jazz. "Our
CPA with Air Canada is core to our present and future success. In 2006 we will
continue to build on the teamwork achieved by employees as supported by last
year's introduction of employee incentives. We will also continue to deliver
solid customer service while pursuing greater efficiencies and continued cost
Air Canada Jazz's Interim Unaudited Fourth Quarter 2005 Consolidated
Financial Statements and Management's Discussion and Analysis (MD&A) will be
available on Air Canada Jazz's website www.flyjazz.ca and at SEDAR.com. A copy
may also be obtained on request by contacting Air Canada Jazz's Investor
Relations at (902) 873-5000.
About Jazz Air Income Fund
Jazz Air Income Fund is an unincorporated, open-ended trust established
under the laws of the Province of Ontario, created to indirectly acquire and
hold an interest in the outstanding limited partnership units of Jazz Air LP.
About Jazz Air LP
Jazz Air LP (Air Canada Jazz) is the largest regional airline and the
second largest airline in Canada after Air Canada, based on fleet size and
number of routes operated. Air Canada Jazz forms an integral part of Air
Canada's domestic and transborder market presence and strategy. Air Canada
Jazz and Air Canada are parties to a Capacity Purchase Agreement pursuant to
which Air Canada currently purchases substantially all of Air Canada Jazz's
fleet capacity based on predetermined rates. Under the capacity purchase
agreement with Air Canada, Air Canada Jazz provides service to and from lower
density markets as well as higher density markets at off-peak times throughout
Canada and to and from certain destinations in the United States. As of
February 1, 2006, Air Canada Jazz operated scheduled passenger service on
behalf of Air Canada with approximately 738 departures per weekday to
56 destinations in Canada and 22 destinations in the United States with a
fleet of 127 aircraft. Air Canada Jazz is the focal point of Air Canada's
regional passenger strategy, providing Air Canada with approximately 96% of
its regional airline capacity based on available seat miles. Air Canada Jazz
and Air Canada have linked their regional and mainline networks in order to
serve connecting passengers more efficiently and to provide valuable traffic
feed to Air Canada's mainline routes.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
Air Canada Jazz's communications often contain written or oral
forward-looking statements which are included in the MD&A and may be included
in filings with securities regulators in Canada and the United States. These
forward-looking statements are 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 statements may involve but are not
limited to comments with respect to strategies, expectations, planned
operations or future actions.
Forward-looking statements, by their nature, are based on assumptions and
are subject to important risks and uncertainties. Any forecasts or
forward-looking predictions or statements cannot be relied upon due to,
amongst other things, changing external events and general uncertainties of
the business. Results indicated in forward-looking statements may differ
materially from actual results for a number of reasons, including without
limitation, restructuring, general industry, market and economic conditions,
war, terrorist attacks, changes in demand due to the seasonal nature of the
business, the ability to reduce operating costs and employee counts, employee
relations, labour negotiations and disputes, pension issues, energy prices,
currency exchange and interest rates, changes in laws, adverse regulatory
developments or proceedings, pending litigation and actions by third parties.
The forward-looking statements contained in this discussion represent Air
Canada Jazz's expectations as of February 10, 2006, and are subject to change
after such date. However, Air Canada Jazz disclaims any intention or
obligation to update or revise any forward-looking statements whether as a
result of new information, future events or otherwise.
(1) CAPACITY PURCHASE AGREEMENT
Air Canada Jazz and Air Canada are parties to a Capacity Purchase
Agreement (CPA) since October 1, 2004. This agreement was amended and
restated on January 1, 2006. Pursuant to the CPA, Air Canada currently
purchases substantially all of Air Canada Jazz's fleet capacity based on
pre-determined rates. Air Canada Jazz provides all crews, airframe
maintenance and, in some cases, airport operations. In turn, Air Canada
determines routes and controls scheduling, ticket prices, product
distribution, seat inventories, marketing and advertising for these
flights. Currently, 99% of Air Canada Jazz's revenues are derived from
(2) NON-GAAP MEASURE
EBITDAR is a non-GAAP financial measure commonly used in the airline
industry to assess earnings before interest, taxes, depreciation and
aircraft rent. EBITDAR is used to view operating results before aircraft
rent and ownership costs, including the impact of foreign exchange on
monetary items as these costs can vary significantly among airlines due
to differences in the way airlines finance their aircraft and asset
acquisitions. EBITDAR is not a recognized measure for financial statement
presentation under GAAP, does not have a standardized meaning and is
therefore not comparable to similar measures presented by other public
entities. Readers should refer to the attached Consolidated Highlights or
Air Canada Jazz's Fourth Quarter 2005 Management Discussion and Analysis
for a reconciliation of EBITDAR before reorganization and restructuring
items to operating income (loss) before reorganization and restructuring
For further information: Media Contacts: Manon Stuart, (902) 873-5054,
Halifax, Nova Scotia; Debra Williams, (519) 659-5696, London, Ontario;
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