- Chorus Aviation (TSX:CHR) has announced a range of new measures to help outlast the COVID-19 pandemic
- Previously announced dividends of C$0.48 per share, originally scheduled for April 17, have been scrapped until further notice
- Chorus will lay off approximately 3,000 staff, and make cuts to the salaries of its senior management
- The company’s Voyageur subsidiary is still operating as normal, to facilitate contract humanitarian missions
- Chorus Aviation (CHR) is currently down 7.45 per cent to $2.36 per share, with a market cap of $379.2 million
Chorus Aviation (TSX:CHR) has announced a range of new measures to help outlast the COVID-19 pandemic.
In the last few months, the outbreak of the virus has significantly damaged a host of industries, including aviation. Strict travel restrictions and global cancellations have resulted in a dramatic downturn in business.
According to estimates from the International Air Transport Association, total year-on-year passenger revenue loss could reach C$356.8 billion.
As a provider of aviation solutions, Chorus does not deal directly with commercial passengers. However, with such far-reaching implications, the company has no choice but to adjust its operations.
In order to preserve cash, the company has scrapped its previously announced dividend of $0.48. The dividend was due to be paid on April 17. Chorus stated that it would pay no other dividends until further notice, with its dividend reinvestment program (DRIP) also on suspension. The decision is likely to save a total of $77 million.
In addition, Chorus Aviation’s President and CEO, Joe Randell, will take a salary cut of 70 per cent. Other members of the executive team will forgo 50 per cent of their salaries. The Board of Directors will take a 25 per cent reduction to their fees.
These new policies are on top of the approximately 3,000 staff members who have already been laid off.
Today’s announcement noted that all company divisions are currently under review, with the intention to resume normal operations when the pandemic subsides.
Randell commented on the new measures, calling COVID-19 the “worst crisis in history” for the aviation industry.
“The rapid and dramatic impact of this pandemic is astounding. We’re taking all measures to ensure the safety of our employees, mitigate costs, bolster our liquidity, and strengthen our relationships with customers.
“These are very difficult decisions, impacting all of our stakeholders. But, they are necessary to ensure we’re ready to emerge from this worldwide crisis as resiliently and quickly as possible,” he concluded.
However, it’s not all bad news. Chorus’s Voyageur subsidiary is maintaining relatively normal operations.
The subsidiary generates less than 10 per cent of Chorus’s revenue. Still, the specialty contract flyer is experiencing continued demand from organisations engaged in humanitarian efforts.
Chorus Aviation (CHR) is currently down 7.45 per cent to $2.36 per share at 10:09am EST.
