The Financial Post reports in its Friday, May 10, edition that Chorus Aviation reduced its dividend by half Thursday citing the uncertainty concerning the outcome of its rate dispute with Air Canada. The Post's Scott Deveau writes that Chorus is chopping its quarterly dividend to 7.5 cents a share, from 15 cents previously. Chorus reported a drop of 35 per cent in its adjusted first quarter earnings. Chorus flies on behalf of Air Canada through its subsidiary Jazz. Chorus has been locked in a protracted battle with Air Canada since 2009 over how much it is paid to fly on its behalf. Under the terms of their so-called capacity purchase agreement, Air Canada essentially purchases all of Jazz's capacity at a fixed rate and sells it back into the marketplace, setting its schedule, and covering certain uncontrollable costs, like fuel. Chorus is paid a mark-up rate over and above its controllable costs and has argued that rate should be 12.5 per cent, while Air Canada has sought to reduce that rate. The dispute is before arbitration, but if the ruling came up in favour of Air Canada, Chorus would owe back payments dating back to Jan. 1, 2010. Chorus is confident of a ruling in its favour.