Chorus Aviation Inc (CHR.TO)

Wants to see the dividend sustainable. Good thing they cut it. He doesn’t like the sector.

They cut the dividend. They fly planes for Air Canada. They have a capacity agreement. It is based on margin. They are in an arbitration process and the dividend was cut in case it goes against them. There is still some potential downside.

The high dividend has just been halved. They kept the dividend going a lot longer then he thought they would. The region/local jet market is where the growth is, but there is competion so there is not much profit. Doesn't like airlines.

Wait for a bit more of a pull back. Are in an arbitration dispute with Air Canada over costs, which will be resolved later this year. Thinks they will be able to pay their dividend.

Operates Jazz, original operation of Air Canada. Right now this company and Air Canada are having a bit of a dispute and is in arbitration, which will have a significant affect on what happens to the stock. He has an optimistic outlook in that the arbitration will be in favour of this company, in which case the stock will go up significantly.

On a price-to-earnings basis, this company looks cheap but at the end of the day, this is an airline. It will continue to be and always will be extremely cyclical. Plus this company is very, very tied to Air Canada and what kind of business Air Canada wants to give it.

14.9% yield. Largely sustainable. May cut it a little. Run Jazz under contract. Air travel is picking up. It is where it is because fair fax put a huge block on the sale. Brokers that bought it took a huge hair cut. People are anticipating a huge cut in the dividend but he doesn’t think it will be that big.

Essentially had a deal with Air Canada, which went to arbitration. Market didn’t think they would continue to pay their dividend. (Current yield of 15.46%.) The initial information on arbitration seems to indicate it favoured Air Canada but it actually gives this company some good margin protection. Thinks they will trim their dividend a little or even maintain it where it is. This is a good period for aviation with loads being quite high and feels the regional collector roots are going to be very strong.

Yielding about 18%-19% right now. Whether they can sustain their dividend is questionable and there is probably a cut coming. In negotiations with Air Canada for a new agreement, that is supposed to be out in 2-3 weeks. He is betting they will have to cut the dividend. If you own, he would suggest you Sell as the dividend could come down 20%-30%.

It is widely acknowledged that they are going to cut their dividend. Some analysts have said that it has already been priced in and that even after it is cut you will have a nice yield, which may be true but this company will always be beholden to Air Canada. This is not a position he would want to be in.

Have a bigger problem than most airlines as they are pretty much 100% tied in with Air Canada (AC.B-T). Would be very wary of this one as well as of their dividend. When a dividend is very high, it means investors believe it is not sustainable.

Doesn’t know if airlines are ever safe. This is the old Jazz income fund. A regional airline does spit out a lot of cash flow. Investors were rewarded with consistent income stream. 20% yield on an airline is unusual. Investors are saying ‘how can they continue to payout such a large dividend.’ Contract with Air Canada will be renegotiated later this year.

Former Jazz. No one has made money since the mention of flight.