Mr. Colin Copp reports

CHORUS AVIATION INC. ANNOUNCES THIRD QUARTER 2023 FINANCIAL RESULTS AND RENEWAL OF NORMAL COURSE ISSUER BID

Chorus Aviation Inc. has released its third quarter 2023 financial results.

"Chorus made steady progress in the quarter on its deleveraging objectives, producing strong adjusted [earnings before interest, taxes, depreciation and amortization] and free cash flow, which contributed to its leverage reduction in the quarter. I am pleased to note that we remain on track to meet our overall guidance for 2023," said Colin Copp, president and chief executive officer, Chorus. "While responding to ongoing macroeconomic challenges affecting our industry, our team remains laser-focused on improving our core business fundamentals. In the third quarter, Chorus generated over $164.3-million in cash from operations and $113.7-million in free cash flow while moving closer to our leverage ratio target, improving it from 4.4 at the end of 2022 to 3.6. While we saw a decrease in quarter-over-quarter earnings, it was primarily due to expected lower lease revenue attributable to 2022 asset sales and last year's inclusion of customer claim recoveries. We remain on track with our overall strategy.

"The regional aviation services segment continued to perform well. We are pleased that Jazz reached a modified collective agreement with its pilots to address the changing pilot wage environment, a positive development that will help strengthen their pilot supply, training capabilities and overall capacity," said Mr. Copp. "A year and a half after the Falko acquisition, we remain confident about the regional aircraft leasing sector and our leading position within the space. Our Falko team is the leading regional aircraft-focused lessor and has successfully completed 17 portfolio aircraft transactions this quarter, including: purchases of aircraft with leases attached, placement of idle aircraft on lease and lease extensions. We also continue to hold productive discussions on the launch of Fund III with potential lead investors."

Renewal of normal course issuer bid

Chorus also announced today that it has received approval from the Toronto Stock Exchange respecting the renewal of its normal course issuer bid. Pursuant to the documentation filed with the TSX, Chorus may purchase for cancellation up to a maximum of 15,160,372 of its Class A variable voting shares and/or Class B voting shares, representing 10 per cent of the public float of the shares as of Nov. 6, 2023, calculated in accordance with the TSX rules.

The directors and management of Chorus believe that, during the period of the NCIB, the market price of the shares may not adequately reflect their value. Therefore, the purchase of shares by Chorus for cancellation may be an attractive investment for Chorus and an appropriate use of its available corporate funds.

As of Nov. 6, 2023, Chorus had 193,873,204 shares issued and outstanding, of which 151,603,722 shares constitute the total public float of the shares. Purchases made pursuant to the bid will be made in the open market through the facilities of the TSX and/or alternative Canadian trading systems at the market price at the time of the purchases in accordance with the rules of the TSX and applicable securities laws. On any trading day, Chorus will not purchase more than 75,688 shares, representing 25 per cent of the average daily trading volume for the six months ended Oct. 31, 2023 (being 302,752 shares), except where such purchases are made in accordance with the block purchase exemptions under the TSX rules. Purchases under the renewed NCIB may commence on Nov. 14, 2023, and will conclude on the earlier of the date on which Chorus has purchased the maximum number of shares permitted under the NCIB and Nov. 13, 2024.

In connection with the renewal of the NCIB, Chorus has renewed its automatic securities purchase plan with its designated broker to allow for the purchase of shares on any trading day during the NCIB during predetermined trading blackout periods, subject to certain limits as to price and number of shares. The plan will commence on the effective date of the renewed NCIB and terminate when the NCIB terminates, unless terminated earlier in accordance with the terms of the plan. Outside of these predetermined blackout periods, shares may also be repurchased in accordance with management's discretion, subject to applicable law. Chorus may vary, suspend or terminate the plan only if it does not have material non-public information, and the decision to vary, suspend or terminate the plan is not taken during a predetermined trading blackout period. The plan constitutes an automatic plan for purposes of applicable Canadian securities legislation and has been reviewed by the TSX.

The renewal of the NCIB follows on the conclusion of Chorus's previous NCIB that expires on Nov. 13, 2023. Under the previous NCIB, Chorus was authorized to purchase up to 15,928,236 shares for cancellation. From Nov. 14, 2022, to Nov. 8, 2023, Chorus purchased 9,177,784 shares through the facilities of the TSX at a weighted-average price of $3.25 per share. There can be no assurance as to how many shares, if any, will be acquired by Chorus pursuant to the renewed NCIB. Shares purchased by Chorus pursuant to the NCIB will be cancelled.

On March 29, 2023, Chorus management held an investor day at which it provided its view that the intrinsic value of the shares was $5.50 per share at the date of the presentation. This information, including the valuation approach and underlying assumptions used by management, is publicly available on Chorus's website.

Consolidated financial analysis

This section provides detailed information and analysis about Chorus's performance for the three and nine months ended Sept. 30, 2023, compared with the three and nine months ended Sept. 30, 2022. It focuses on Chorus's consolidated operating results and provides financial information for Chorus's operating segments.

Outlook

Jazz's capacity remains constrained as the industry-wide demand for pilots continues. In the past 12 months, Jazz has seen over 300 captain or captain-eligible pilots flow to Air Canada under the existing pilot flow agreement, along with attrition to other mainline airlines. In that same time period, Jazz has hired and trained over 300 first officers and continues to see a good supply of new hire pilots. Effective Sept. 1, 2023, Jazz and the Air Line Pilots Association representing the Jazz pilots entered into a modified collective agreement to address the changing pilot wage environment.

Jazz expects this trend on flow of pilots to Air Canada to continue in the near term.

The CPA provides a fixed fee to Jazz regardless of flying levels; therefore, any variations in flying are not expected to have any impact on Jazz's earnings.

Falko continues to have positive discussions on its new fund (Fund III) with its existing lead investors in Fund II and others. Chorus is also routinely exploring opportunities to sell Falko's wholly owned or majority-owned aircraft to advance the implementation of its asset-light leasing strategy.

Chorus has the key elements to execute on its strategy to transition to an asset-light leasing model while expanding its contractual fund management business and its RAS segment. The key elements include:

• Strong and predictable core earnings from the RAS segment, with the potential to expand into adjacent and complementary business lines;
• Significant wholly owned or majority-owned aviation assets that can be monetized to reduce debt and return capital to common shareholders while also providing financing to improve the growth and return profile of the business over time through accretive investments;
• Growth potential in the Falko series of funds from which Chorus can generate attractive returns through asset management fees, co-investment returns and incentive payments.

The asset-light leasing model will enable Chorus to achieve greater scale in its leasing business by co-investing alongside third party equity investors in Falko-managed funds, while decreasing risk to Chorus by reducing the use of recourse debt financing. As Chorus transitions to an asset-light leasing model, asset sales will generate free cash flow that can be deployed to pursue accretive investment opportunities and/or return capital to common shareholders. As part of this asset-light transformation, Chorus is targeting:

• Aircraft asset sales: Chorus intends to opportunistically trade RAL's wholly owned or majority-owned aircraft, including in connection with the windup of its 67.45-per-cent ownership in Ravelin Holdings LP, by the 10th anniversary of the commencement of Fund I (2025). As of Sept. 30, 2023, Ravelin Holdings held an interest in 39 aircraft with a net book value of $386.5-million (U.S.) and secured debt of $193.7-million (U.S.). As asset sales occur, the related leasing revenues in RAL will decrease, which will be partially offset by lower depreciation and debt servicing costs and earnings from Falko managed funds.
• Reduced leverage: Chorus anticipates its leverage ratio will be between 2.5 to 3.5 by Dec. 31, 2024, given the contractual nature of Chorus's earnings, amortizing debt repayments and expected asset sales. Deleveraging amounts will vary from quarter to quarter depending on the timing and quantum of asset sales.
• Growth: Chorus intends to expand the number of Falko managed funds and the RAS business into adjacent and complementary specialty aviation business lines.

Investor conference call/audio webcast

Chorus will hold an analyst call at 9 a.m. ET on Nov. 9, 2023, to discuss the third quarter 2023 financial results. The call will be available by dialling 1-888-664-6392. The call will be simultaneously audio webcast.

This is a listen-in-only audio webcast.

The conference call webcast will be archived on Chorus's website under investors and then reports. A playback of the call will also be available until 12 a.m. ET on Nov. 16, 2023, by dialling toll-free 1-888-390-0541 and using passcode 414059 followed by the number key.

About Chorus Aviation Inc.

Chorus is a leading, global aviation solution provider and asset manager, focused on regional aviation. Its principal subsidiaries are: Falko Regional Aircraft, the leading pure play regional aircraft asset manager and lessor, managing investments on behalf of third party fund investors; Jazz Aviation, the largest regional operator in Canada and provider of regional air services under the Air Canada Express brand; Voyageur Aviation, a leading provider of specialty charter, aircraft modifications, parts provisioning and in-service support services; and Cygnet Aviation Academy, an industry-leading accredited training academy preparing pilots for direct entry into airlines. Together, Chorus's subsidiaries provide services that encompass every stage of a regional aircraft's life cycle, including: aircraft acquisition and leasing; aircraft refurbishment, engineering, modification, repurposing and transition; contract flying; aircraft and component maintenance, disassembly, and parts provisioning; and pilot training.

Chorus Class A variable voting shares and Class B voting shares trade on the Toronto Stock Exchange under the trading symbol CHR. Chorus's 5.75 per cent senior unsecured debentures due Dec. 31, 2024, 6.00 per cent convertible senior unsecured debentures due June 30, 2026, and 5.75 per cent senior unsecured debentures due June 30, 2027, trade on the Toronto Stock Exchange under the trading symbols CHR.DB.A, CHR.DB.B and CHR.DB.C, respectively.

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