Is Air Canada Express on schedule?

     In it's last quarterly report ,Chorus Aviation talked about moving towards some kind of new agreement with Air Canada on the operation of Air Canada Express.It is not clear yet whether this has been covered in the Air Canada amended CPA agreement.But a number of things are becoming clearer.Chorus and it's partner Georgian Air Lines own the majority of the equipment(140 of 171 aircraft) in Air Canada Express now and Chorus has already ordered new aircraft for 2017.The division of duties or functions as well as revenues has not been decided yet.Or if it has the public has not yet been told of it.This blog predicts that Chorus will have more,not less, earnings from the new operational agreement.It is also likely that Air Canada will earn more revenue under the new setup as well.
                                      

    The new Chorus Structure 
 Workathon has in the last two or three posts on Chorus talked about the new structure that is emerging from out of the old company.Chorus now has a bigger maintenance operation and it has a new specialized charter operation centred around it's latest acquisition called Voyageur Airways.Both seem to be bringing in additional revenues and earnings.Consequently after Chorus showed in 2016 a good first quarter of $.29 or $.30 per share this blog predicted annual earnings of about $1.25 per share.But Chorus showed investors in the second quarter that it's earnings exceeded all analysts predictions as it came in with earnings per share of $.54 to $.56 .This increased this blog's prediction for annual earnings of $1.65 to $1.85 per share.
  It is hard to explain the extra earnings when the revenues from the amended CPA agreement are coming down not up.One possibilty is that Chorus is now earning more money from it's secondary operations such as maintenance and charter business.But it must be generating some earnings now from the Air Canada Express operation.According to Macleans magazine Air Canada has had two bad quarters in a row and needs more revenues and earnings.According to Macleans magazine Air Canada needs more revenues and it would be in their interest to make Air Canada Express more profitable.This blog agrees with this position and feels that giving more autonomy to Chorus and Georgian Air Lines to run Air Canada Express will certainly help.So with this in mind it is likely that Chorus will have another good quarter coming up and e.p.s may even beat that of the second quarter.
                                                  

               The third Quarter
   Chorus Aviation has increased it's earnings per share above expectations in 2016.Qtrade (a small broker) estimates their earnings per share at about $1.60 per share for the year and Yahoo Finance estimates it at only $.80.Workathon estimated annual e.p.s. at $1.25 per share after the first quarter and now (after a good second quarter) at about $1.75 per share.Chorus may be making more from Air Canada Express than all parties originally forecast and now may be ready to beat the trend of the first half.If so look for Chorus to hit $7.50 in October.I don't think Air Canada will be unhappy.