Chorus Aviation Reports $13.8 Million Q2 2026 Net Income

During Chorus Aviation Q2 2026, the Canadian holding company navigated contracted declines in its leasing business by accelerating its aerospace aftermarket expansion. The company's performance was bolstered by the recent KADEX Aero Supply acquisition and parts sales, which offset expected rate adjustments under the Jazz Aviation CPA. These results highlight how Chorus is actively managing its Air Canada Express fleet while diversifying its underlying earnings streams.

The shift in earnings composition reflects a deliberate strategic transition for Chorus. While contracted changes under the Capacity Purchase Agreement (CPA) with Air Canada reduced fixed margins and leasing revenues, the integration of KADEX Aero Supply Limited (KADEX) and Voyageur Aviation's parts business contributed an additional $6.5 million to Adjusted EBITDA. This diversification helps insulate Chorus from regional airline capacity fluctuations, providing a more resilient cash flow profile to support long-term capital allocation plans.

Core Financial Performance and Asset Sales

For the three months ended June 30, 2026, Chorus reported Adjusted EBITDA of $50.7 million, down slightly from $51.3 million in Q2 2025. This $0.6 million decrease was driven by a $2.1 million reduction in aircraft leasing revenue under the CPA and a contracted $4.5 million decline in Fixed Margin and incentive revenue. However, these losses were largely offset by Voyageur's parts sales and the newly integrated KADEX business, which was acquired on April 1, 2026. KADEX generated $16.4 million in revenue and $1.2 million in net income during its first quarter under Chorus ownership, performing ahead of initial management projections.

Adjusted Net Income rose to $19.1 million, an increase of $5.0 million year-over-year. This growth was aided by a $2.8 million positive foreign exchange variance, a $2.5 million gain on the sale of property and equipment, and a $2.1 million decrease in depreciation expenses following aircraft divestments. Conversely, GAAP net income fell by $18.6 million to $13.8 million, primarily due to a negative non-cash change in net unrealized foreign exchange of $19.7 million.

On the Toronto Stock Exchange (TSX), where Chorus trades under the symbol CHR, the company continued to execute its capital return strategy. Under its renewed Normal Course Issuer Bid (NCIB) authorized by the TSX, Chorus repurchased and cancelled 616,891 Common Shares during the quarter at a weighted average price of $23.97 per share, totaling $14.8 million. Combined with $2.5 million in dividend payments, Chorus returned $17.3 million to shareholders in Q2 2026.

Historical Context and Fleet Modernization

Chorus's current diversification strategy mirrors its historical precedent from 2015, when it acquired Voyageur Aviation. That transaction marked the company's first major step beyond its core Air Canada contract, introducing specialty charter, engineering, and parts provisioning. Similarly, the KADEX acquisition reinforces this secondary growth pillar.

Under the foundational CPA with Air Canada, which was extended in January 2019 to run through 2035, Jazz Aviation continues to manage the Air Canada Express regional network. While the CPA guarantees long-term revenue stability through a fixed margin, it is subject to scheduled rate step-downs. To maintain asset value, Jazz is executing a comprehensive cabin refurbishment program funded by Air Canada. This program covers 39 owned aircraft leased under the CPA after 2026, including upgrading the interiors, adding Wi-Fi, and installing new lightweight seats on Embraer 175 (E-175) and Bombardier CRJ900 (CRJ900) regional jets, as well as selected De Havilland Canada Dash 8-400 (Dash 8-400) turboprops.

The Revenue Diversification Strategy

The financial results from Q2 2026 demonstrate the structural transition of Chorus from a pure-play regional ACMI (aircraft, crew, maintenance, and insurance) provider to an integrated aviation services and logistics group. Historically, the company relied almost exclusively on the Air Canada CPA for its cash flow. However, the predictable step-downs in CPA leasing rates require a counter-cyclical revenue stream. By expanding into high-margin, recurring aftermarket parts distribution via KADEX and Voyageur, Chorus is building an ecosystem where parts provisioning, maintenance, repair, and overhaul (MRO), and pilot training offset the natural maturation of its aircraft leasing portfolio. This strategy lowers the company's risk profile, as evidenced by the improvement in its leverage ratio to 1.5x from 1.7x at the end of 2025.

Upcoming Fleet Transitions and Upgrades

Chorus is progressing with its asset monetization program to fund its long-term capital allocation plan of $500 million to $550 million between 2026 and 2029.

• December 2026: Chorus expects to complete the sale of the remaining two Dash 8-400 aircraft out of a nine-aircraft package negotiated in 2025. This transaction is expected to generate approximately US $14.4 million in net proceeds, adding to the seven units already sold (including four sold in Q2 2026 for $40.4 million).
• September 15, 2026: Record date for the declared cash dividend of $0.11 per share, with payment scheduled for September 30, 2026.
• Ongoing Refurbishments: The Air Canada-funded passenger cabin retrofits for the E-175 and CRJ900 fleets will continue through the year, enhancing the passenger experience on Air Canada Express routes.

The Shift to High-Margin Aftermarket Services

For aviation investors, Chorus's performance proves that regional operators can successfully pivot away from single-customer concentration. By reinvesting CPA-derived cash flows into high-return aerospace supply chain assets like KADEX, Chorus is establishing a diversified business model that maintains strong liquidity ($203.6 million) while consistently returning capital to shareholders.