Chorus Aviation needs another Step

   Several blogs on Workathon have talked about and suggested a restructuring of both the  quarterly report and it's corporate structure of Chorus Aviation.Some of these blogs are July12,2015 and Nov.18,2014 and October23,2013.click here for details .But in fact over the last two years this blog has seen that the changes are becoming more visible- both in the quarterly report and the corporate structure.For example, since the C.P.A agreement with Air Canada was amended the regulated revenues and income have fallen.The fall has been gradual but clear.But the category called non-operational income (by Chorus) and non-regulated income by this blog has grown.Chorus reports that there was an increase of $70 million in non-operating income over the same quarter in 2015.This is dramatic and points to a number of  structural changes.It also points to the  fact that EBITDA had a substantial increase not decrease in the last quarter.
    Initial Steps
   Chorus underwent a number of changes.Their initial step was in 2012 and 2013 to invest in a number of foreign airline operations,including one in South America.Most of these were far from home but quite profitable.After a little fixing up and improving they were put back on the market and sold for a tidy profit.They also had a maintenance operation in the London, Ontario airport.This also was sold for a good profit and their entire maintenance operation was moved to Halifax where their headquarters are.They bought a number of small specialized maintenance firms like Telesys  and started to increase the size of their maintenance operation and revenues.
        This gave them a little independence but they were still very dependent on their main C.P.A. agreement with Air Canada.Recently they bought a specialized charter operation called Voyageur Airways in North Bay, Ontario and have bought a few more CRJ regional jets for this operation.Chorus says that only $10 to $20 million of EBITDA comes from this subsidiary yet.This blog predicts that more investment will be spent here in 2016.
     A Good Quarter
  The first quarter of 2016 was a good one for Chorus as net income was $55 million which was a record quarter.But this quarter recorded almost $40 million in foreign exchange gains as well as a large amount of  what they call non-operating income.Can they repeat this in the second quarter?
  Net income was $55 million or about $.48 to $.50 per share but the more important EBITDA was $45 million or about $.29 to $.30 per share.EBITDA gives us a better measurement of earnings per share and if Chorus can come in with $35 to $40 million in the next quarter this will be a successful first half. This will indicate that Voyageur Airways as well as their maintenance operations are becoming more successful. Furthermore earnings per share will be around $.66 to $.70 per share for the first half and $1.30 to $1.40 per share for the full year.The second quarter will tell investors how successful their restructuring has been and how much more remains.
    This blog predicts that EBITDA will be around $33 to $35 million for the second quarter and $.60 per share for the first half.Still,

on track to hit $1.25 per share for the year and maybe even raise the dividend.This blog expects Voyageur to have growing pains and C.P.A. revenues to be down from the first quarter.The wildcard here will be how much revenues they earn from their  maintenance agreements,including the one with Bombardier.                                   read expectations for the second quarter;  read expectations for Chorus Av. second quarter